Some empirical findings on the structural development of the Estonian economy

Claus-Friedrich Laaser, Janno Reiljan and Klaus Schrader

No 1998, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: Estonia is widely regarded as a paramount example for a successful transformation of a socialist economic system to a functioning market economy. Against the backdrop of this positive image which contrasts strongly with the crisis scenarios in Southern Europe the remaining problems of Estonia are often ignored. Estonia has hardly succeeded in catching-up economically with the richer countries of the euro area. In this paper the authors raise the question what the causes of the sluggish catching-up process are, and which opportunities Estonian economic policy has in order to close the wealth gap. It turns out that Estonia faces a serious productivity problem, particularly in the manufacturing sector producing tradable goods which is normally the driving engine behind economic and technological catching-up. The Estonian economy has failed to undergo the necessary structural change towards technologically more advanced employment structures and export patterns. Accordingly, Estonian economic policy needs to create a suitable business environment to support this kind of structural change.

Keywords: Estonia; catching-up; growth and structural change (search for similar items in EconPapers)
JEL-codes: F14 O12 O52 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1998

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