A Dual-Model Approach to Measuring Income Convergence Sustainability in European and Asian Emerging Economies

The 'tiger' economies of Southeast Asia and the transition economies of Central and Eastern Europe have encountered both rapid growth and considerable upheaval in the past two decades. This study examines the extent to which the two regions have converged to industrialized-country levels of per capita income growth, using the convergence criteria defined in Sala-i-Martin (1996), for the 1992-2007 period. The sustainability of convergence going into the future is estimated using a variant of the balance of payments constrained-growth theory developed in Thirlwall (1979). My findings suggest that both regions exhibit fairly rapid convergence, which is likely to continue in the future due to favorable export demand elasticities, technological diffusion, and total factor productivity.