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Mind the break! Accounting for changing patterns of growth during transition

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  • Fidrmuc, Jan
  • Tichit, Ariane

Abstract

We argue that econometric analyses of post-communist countries are vulnerable to structural breaks across time and/or countries. We demonstrate this by identifying structural breaks in growth regressions estimated for 25 countries over 18 years. The method we use allows identification of structural breaks at a priori unknown points in space or time. The only prior assumption is that breaks occur in relation to progress in implementing market-oriented reforms. We find that the pattern of growth in transition has changed at least three times, yielding four different models of growth. The speed with which individual countries progress through these stages differs considerably.

Suggested Citation

  • Fidrmuc, Jan & Tichit, Ariane, 2009. "Mind the break! Accounting for changing patterns of growth during transition," Economic Systems, Elsevier, vol. 33(2), pages 138-154, June.
    • Handle: RePEc:eee:ecosys:v:33:y:2009:i:2:p:138-154
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    More about this item

    Keywords

    Growth Reform Structural breaks Transition;

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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