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Foreign and domestic growth drivers in Eastern Europe

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  • Weber, Enzo

Abstract

This paper analyses the growth effects of capital formation, exports and FDI as major, drivers of economic development in Eastern Europe. The fundamental innovations are, identified by empirically and theoretically motivated short- and long-run restrictions in, structural cointegrated vector autoregressions. Impulse responses and variance, decompositions reveal quite different growth effects in various Eastern European countries. Generally, a strong reliance on exports goes along with higher GDP, and FDI bears, substantial potential for fostering economic growth. It is shown that the recent worldwide, recession clearly hit Eastern Europe through the export channel, whereas the recovery is, mainly supported by positive demand shocks.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Systems.

Volume (Year): 35 (2011)
Issue (Month): 4 ()
Pages: 512-522

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Handle: RePEc:eee:ecosys:v:35:y:2011:i:4:p:512-522

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Keywords: Eastern Europe; Growth; Exports; Investment; Identification;

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  1. Marcella Nicolini & Laura Resmini, 2010. "FDI spillovers in new EU member states," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(3), pages 487-511, 07.
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Cited by:
  1. Iwasaki, Ichiro & Tokunaga, Masahiro, 2013. "Macroecnomic Impacts of FDI in Transition Economies: A Meta-Study," RRC Working Paper Series 39, Russian Research Center, Institute of Economic Research, Hitotsubashi University.

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