Open AccessDecade in transition economies - comparative analysis of economic growth
Author(s) -
Jiří Jaroš
Publication year - 2001
Publication title -
prague economic papers
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.233
H-Index - 17
eISSN - 2336-730X
pISSN - 1210-0455
DOI - 10.18267/j.pep.178
Subject(s) - economics , inflation (cosmology) , panel data , index (typography) , index of economic freedom , liberalization , sustainable growth rate , soviet union , transition countries , econometric analysis , government (linguistics) , economic freedom , macroeconomics , econometric model , politics , economic system , international economics , econometrics , market economy , political science , linguistics , philosophy , physics , finance , theoretical physics , world wide web , computer science , law
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.