Monthly Report No. 3/2019

Richard Grieveson, Mario Holzner, Gabor Hunya and Leon Podkaminer

No 2019-03, wiiw Monthly Reports from The Vienna Institute for International Economic Studies, wiiw

Abstract: Chart of the month European investment since the crisis by Richard Grieveson Opinion corner How to fill Europe’s investment gap by Mario Holzner Investment in the EU has been declining since the outbreak of the global financial crisis. While Europe was indulging in self-destructive austerity, China was inter alia building a huge high-speed rail network. Given the big weight of German public investment in the EU, it is pivotal that Germany reverses the course of its fiscal policy. In this column we suggest a coordinated pan-European infrastructure investment project inspired by the Chinese Belt and Road Initiative – the ‘European Silk Road’. Recent investment trends in CESEE countries supply-side fundamentals of the catch-up are weak by Leon Podkaminer It is suggested that capital formation in CESEE countries is insufficient for safeguarding a sustained income catch-up with the developed countries. The recent slowdown in investment growth which started in 2009 yet cannot be blamed on inadequate investment profitability. In fact, profitability is generally much higher than in the years 1995-2005. Outward FDI and intra-regional integration of EU-CEE11 countries by Gábor Hunya Outward FDI is still of much smaller magnitude than inward FDI in EU-CEE11, while the net FDI position is only loosely linked to the level of economic development. The level of outward FDI has increased over time but not in all countries of the region. A significant share of outward FDI has been within the region but the share of intra-regional investment has declined in the case of the larger investors. Monthly and quarterly statistics for Central, East and Southeast Europe

Keywords: investment; gross fixed capital formation; EU; austerity; connectivity; infrastructure; convergence; productivity; FDI; economic integration (search for similar items in EconPapers)
Pages: 47 pages including 6 Tables and 31 Figures
Date: 2019-03
New Economics Papers: this item is included in nep-tra
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