Regional disparities in Central and Eastern Europe rose substantially since 1990. Still, prima facie evidence of beta-convergence … convergence. In both CEE and the ‘old’ EU15, regional convergence is strongly linked to the level of national development, non …-linearly. But while in the EU15 convergence speeds-up at intermediate/high levels of development, in CEE we find divergence at …

. We assess the role of these external effects in explaining growth and economic convergence. We present a simple growth …

of these effects in a growth equation may downward bias the estimated rate of convergence by assingning the effect of … regional externalities to the convergence parameter. We propose the use of spatial econometrics techniques to test and estimate …