Back to the Future: The Growth Prospects of Transition Economies Reconsidered

Nauro Campos

CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague

Abstract: There are two strands in the empirical literature on economic growth in transition economies. One focuses on the impact of reforms, while the other emphasizes sustainability issues and the growth prospects these economies face. The most common strategy, in the latter, has been to use coefficients from growth regressions, on large samples of developing countries, and impose them on transition economies’ data to obtain projected growth rates. We refer to it as the BLR approach (because it uses specifications from Barro, and Levine and Renelt). We claim that the reported growth rates are suspiciously similar, painting an overly optimistic picture and yielding few policy lessons. We re-estimate the BLR equations for data on transition economies themselves and find that government expenditures have been positively associated and human capital has been negatively associated with output growth. These results contrast sharply with the assumptions and findings from the BLR approach, questioning its might and challenging our understanding of the transition process in its key dimension.

Keywords: Transition economies; economic growth; growth prospects. (search for similar items in EconPapers)
JEL-codes: E23 O40 P20 P52 (search for similar items in EconPapers)
Date: 1999-06
References: Add references at CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.cerge-ei.cz/pdf/wp/Wp146.pdf (application/pdf)

Related works:
Working Paper: Back to the Future: the Growth Prospects of Transition Economies Reconsidered (2000)
Working Paper: Back to the future: The growth prospects of transition economies reconsidered (2000)
Working Paper: Back to the Future: The Growth Prospects of Transition Economies Reconsidered (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cer:papers:wp146

Access Statistics for this paper

More papers in CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague Contact information at EDIRC.
Bibliographic data for series maintained by Lucie Vasiljevova ().