Values, institutions and the rise of Eastern Europe

We study convergence in a sample of 37 European countries to the German real GDP per capita level during the period 1999-2014 with the aim of testing whether the speed of convergence – that measures the spread of innovations across countries – is uniform or depends on the currency regime, institutions or values. The results suggest that the post-communist economies are converging more rapidly than other countries in the sample – hence leaning more rapidly from the innovations in other countries, especially those that belong to the European Union, and that controlling for the communist past, the Eurozone is converging more rapidly than the non-euro EU member countries. Moreover, we find that certain values are conduce to the catching up process and that it has generated increased job satisfaction and male labour force participation