Prague Economic Papers 2001, 10(3) | DOI: 10.18267/j.pep.178
Decade in transition economies - comparative analysis of economic growth
The aim of this paper is to empirically analyze the determinants of growth in transition economies of Central and Eastern Europe and countries of former Soviet Union, using panel data for 25 countries for the longest available period 1989 - 1999. The paper's main finding is that macroeconomic stabilization (represented by inflation) and structural reforms (represented by the liberalization index) together with a reduction of Government expenditures are vital keys for success in achieving sustainable economic growth. The econometric analysis proves that initial effects of reform measures are likely to be negative, but are over time outweighed by positive outcomes. The results also indicate that even though initial conditions hurt growth, their effect is likely to be small compared to other factors and tends to diminish with time. Other commonly mentioned variables, like political freedom, seem to have only marginal ability to explain various growth patterns in transforming economies.
Keywords: transition, economic growth, regression
Published: January 1, 2001 Show citation
This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (CC BY NC ND 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.