Prague Economic Papers 2012, 21(3):277-290 | DOI: 10.18267/j.pep.424

The Evaluation of an Economic Distance Among Countries: A Novel Approach

Jiří Mazurek
Silesian University in Opava, Univerzitní nám. 1934/3, 733 40 Karviná, Czech Republic (mazurek@opf.slu.cz).

The aim of the article is to propose a new measure of a relative economic distance between two countries (RED) or among a group of countries (GRED). Both measures enable to evaluate 'proximity' between national economies through time series of selected variables, and are related to the concept of the sigma (beta) convergence introduced by Barro and Sala-i Martin (1995). In the empirical part of the paper, the RED of Poland, Slovakia, Austria, Germany, the USA and Japan with regard to the Czech Republic are estimated, as well as the time evolution of the GRED of the Czech Republic and its neighbours. The main finding is the strong convergence among these countries after the outbreak of the financial crisis which persists to this day.

Keywords: unemployment, correlation, GDP, relative economic distance, the Czech Republic
JEL classification: C19, F50, O57

Published: January 1, 2012  Show citation

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Mazurek, J. (2012). The Evaluation of an Economic Distance Among Countries: A Novel Approach. Prague Economic Papers, 21(3), 277-290. doi: 10.18267/j.pep.424
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