Nominal and real stochastic convergence of transition economies

To investigate the sensitivity of real and nominal economic convergence of transition economies to model specification and restrictions, we extend the work of Kočenda [J. Compar. Econ. 29 (2001) 1] by considering a more stable, post-1993 period and by adopting a more recent panel estimation approach. This new technique involves less restrictive assumptions than previous panel unit root techniques by allowing heterogeneity in convergence rates. Our results show less nominal and real economic convergence than those of Kočenda. © 2003 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved