Hence, in order to enhance the process of real convergence as much as possible, accession countries should ensure that they make progress in the restructuring of their economies and gradually align them with those of the euro area. Real convergence is often interpreted as a catching-up in real income with the EU.
Unless additional supply is somehow forthcoming, however, expanding demand just produces overheating and inflation. Inflation did pick up in Australia during the middle years of the current decade, from 2.4 per cent in 2003, to 2.6 per cent in 2004, 2.8 per cent in 2005, and 4 per cent by mid 2006.