Researcher ORCID Identifier

0009-0006-1584-3491

Graduation Year

2026

Date of Submission

4-2026

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Ricardo Fernholz

Rights Information

© 2026 Armine Kardashyan

Abstract

This paper studies whether poorer regions in Central and Eastern Europe have caught up to richer ones since EU enlargement, and whether any observed catch-up reflects absolute convergence or convergence conditional on regional fundamentals. Using annual NUTS-3 data for eleven Central and Eastern European member states from 2000 to 2023, I estimate rolling ten-year convergence regressions within a steady-state framework in which regional GDP per capita depends on investment, human capital, and within-window exposure to EU membership.

The results show strong evidence of conditional convergence during the early and middle phases of enlargement. Regions that begin a window above their predicted steady states subsequently grow more slowly than regions below them, consistent with transitional adjustment toward heterogeneous steady states. However, this relationship weakens substantially over time and becomes statistically indistinguishable from zero in later periods. Absolute convergence is weaker throughout and disappears earlier.

These findings suggest that EU enlargement was associated with meaningful but ultimately transitional regional catch-up. Poorer regions did not converge toward a common GDP per capita level; instead, they converged toward region-specific steady states shaped by differences in human capital, investment, and EU exposure. As a result, convergence in growth rates translated into only modest reductions in cross-regional GDP per capita dispersion, implying that persistent differences in underlying fundamentals continue to sustain spatial inequality.

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