The analysis of economic growth is one of the most important problems considered in modern economies. One of its aspects is the real economic convergence, commonly known as the catching-up effect. It is vital for poorer countries to determine the factors of economic growth and the possibilities of catch-up with richer, more developed countries.
This knowledge can influence policy-makers’ decisions, which allows one to speed-up the convergence process or counteract any unwanted effects. The aim of this project is to propose a new empirical method for analysing the phenomenon of real economic convergence, as well as to check in detail the effectiveness of the adopted approach. Implementation, computer simulations and scientific description of results of empirical analysis are all important parts of the research.
The key concept of the proposed method, which is innovatory considering its application, is integration of the existing broad theory of economic convergence with a new sophisticated tool known as the hidden Markov model (HMM).