Interest premium and economic growth: the case of CEE

Dániel Baksa and István Kónya
Additional contact information
Dániel Baksa: Central European University and Center for Economic and Regional Studies

No 266, NBP Working Papers from Narodowy Bank Polski

Abstract: This paper views the growth and convergence process of the four Visegrad economies - the Czech Republic, Hungary, Poland and Slovakia - through the lens of the open economy, stochastic neoclassical growth model. We use a unified framework to understand both the long-run convergence path and fluctuations around it. Our empirical exercise highlights both the role of initial conditions such as indebtedness and capital intensity, and random shocks in the growth process. In particular, we explore the importance of the external interest rate premium, and its role in driving investment and the trade balance.

Keywords: stochastic growth; technology shocks; interest premium; small open economy; Bayesian estimation. (search for similar items in EconPapers)
JEL-codes: E13 O11 O41 O47 (search for similar items in EconPapers)
Pages: 29
Date: 2017
New Economics Papers: this item is included in nep-eec, nep-gro, nep-mac and nep-tra
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://static.nbp.pl/publikacje/materialy-i-studia/266_en.pdf (application/pdf)

Related works:
Working Paper: Interest premium and economic growth: the case of CEE (2017)
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:nbp:nbpmis:266

Access Statistics for this paper

More papers in NBP Working Papers from Narodowy Bank Polski Contact information at EDIRC.
Bibliographic data for series maintained by Jakub Growiec ().