Does Poland's economy meet the criteria of real convergence with the euro area?

Abstract

EU catching up countries, which operate in a monetary union with highly developed countries, recorded good economic results until the 2008+ crisis. However, their resistance to the economic recession turned out to be much lower than that of the economically stronger countries (except Poland). The discussion on deepening monetary integration, which has been going on for several years, will make countries outside the euro area face a difficult decision - to maintain the current status quo or adopt the common currency. The authors recognized that the basis for the decision in this matter should be the level of economic convergence with the more developed countries of the EMU. That is why the aim of the paper is to assess the level of economic convergence of Poland with selected countries - with the highest level of development (Austria, Germany, France, the Netherlands) and catching up ones (Spain, Portugal and Slovakia). The time range of the analysis covers the years 2002-2019. The following economic indicators and measures of convergence were used: GDP and GDP per capita, labor productivity, employment, investments, unit labor costs, TFP, unemployment, exports and inflation, as well as indicators illustrating the situation in public finances and external equilibrium. The empirical analysis was based on the OCA theory. The main result of this analysis is that Poland has made great progress in meeting the criteria of economic convergence, but there is still a risk of economic shocks, which may lead to a decline in the competitive advantage and exports, and consequently GDP dynamics.