Politická ekonomie 2021, 69(5):571-594 | DOI: 10.18267/j.polek.1327

Real Convergence in EU: Is There a Difference Between the Effects of the Pandemic and the Global Economic Crisis?

Aleksandra Fedajev ORCID...a, Magdalena Radulescu ORCID...b, Ana-Gabriela Babucea ORCID...c, Vladimir Mihajlovic ORCID...d
a University of Belgrade, Technical Faculty in Bor, Republic of Serbia
b University of Pitesti, Faculty of Economic Sciences, Romania
c Constantin Brancusi University of Targu Jiu, Faculty of Economics, Romania
d University of Kragujevac, Faculty of Economics, Republic of Serbia

This paper aims to shed some light on the real convergence process among EU economies in the context of the COVID-19 pandemic crisis in comparison to the real convergence in 2008, when the last financial crisis erupted. According to entropy method results, the most pronounced difference between effects of the current pandemic and the global financial crisis are registered in the unemployment rate, while the difference in the current account balance and GDP per capita are much less noticeable. The results of the entropy method also suggest that the greatest difference among EU economies in 2020 is registered in the current account deficits; a slightly lower difference is registered in the unemployment rate, while the divergence in GDP is much less pronounced. To explain the results of the entropy method, a hierarchical cluster analysis is performed and three clusters are derived. Based on the identified characteristics of the derived clusters, some policy recommendations for overcoming the current crisis are defined.

Keywords: Pandemic crisis, convergence, EU, entropy method, cluster analysis
JEL classification: A12, E61, E63, R12

Received: October 14, 2020; Revised: June 26, 2021; Accepted: July 16, 2021; Published: October 22, 2021  Show citation

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Fedajev, A., Radulescu, M., Babucea, A., & Mihajlovic, V. (2021). Real Convergence in EU: Is There a Difference Between the Effects of the Pandemic and the Global Economic Crisis? Politická ekonomie, 69(5), 571-594. doi: 10.18267/j.polek.1327
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