Is EMU a triggering factor for convergence or not? Empirical evidence using Phillips and Sul methodology

The enlargement of the European Union and the integration into the Economic and Monetary Union represents a complex phenomenon whose impact is extremely hard to quantify. A macroeconomic uniformity and creating some interconnections among member states constitute an extremely hard to achieve objective due to the high degree of diversity that characterize the involved economies. This lead to the need for what the economists call sustainable convergence, whether we refer to the institutional, legal, fiscal or monetary framework. This paper aims to investigate to current degree of convergence between the members of the European Union that joined this structure in 2004 and 2007 using a complex methodology elaborated by Phillips and Sul in order to test the hypothesis whether this membership leads to reducing or by contrast increasing the gap between economies. The obtained results confirm the convergence hypothesis between the new member states of the European Union, with more visible evidence among the states that already adopted euro but we must take into consideration the fact that this group is far away from the EU average in what concerns the GDP/capita.