Towards a new growth model in CESEE: Convergence and competitiveness through smart, green and inclusive investment

Áron Gereben and Patricia Wruuck

No 2021/01, EIB Working Papers from European Investment Bank (EIB)

Abstract: This paper focuses on the growth and convergence of Central, Eastern and South-Eastern European EU countries (CESEE). We argue that the factors behind the pre-crisis growth model of the region - skilled yet affordable labour force, foreign direct investment, imports of productivity-enhancing technology - are petering out, and are yet to be substituted. We propose a new growth model centred around a shift towards more home-grown innovation, digitalisation, climate change mitigation and a strong focus on skills, labour and social inclusion to leave the middle income trap behind for good and to boost economies' growth prospects in a post-COVID world. Based on analysis of firm-level data, we highlight the prerequisites of making this transition happen.

Keywords: climate change; convergence; economic policy; digitalisation; innovation; labourmarket; long-term growth; productivity; skills (search for similar items in EconPapers)
JEL-codes: J24 O14 O33 O40 P27 P28 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-env, nep-fdg, nep-gro, nep-lma and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:eibwps:202101

DOI: 10.2867/1421

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