Explanation of Economic Growth Differences in the CEE Countries: Importance of the BOP Constraint
This paper presents a balance-of-payments (BOP) constrained growth analysis of the long-run growth process in the Central and Eastern European (CEE) countries during the recovery period of transition (1995-2004). The paper tests the BOP-constrained growth model, based on the specification of a dynamic import function, which describes the short-term and long-term import behaviour in a different way. McCombie and Thirlwall have implicitly argued for a similar specification of the import function in the analyses of this kind. Econometrically, the import function is formulated, in this article, as a conditional Error Correction Model (ECM). It is shown that even the basic BOP-constrained growth model captures well the disparity of growth rates of the gross domestic product (GDP) in the CEE countries. Furthermore, the use of this approach does not point to any 'puzzles of the Baltic growth' that were observed in the analysis by Campos and Kinoshita (2002) based on the supply side model which included the transition-specific variables
Volume (Year): 5 (2005)
Issue (Month): 2 (July)
|Contact details of provider:|| Postal: |
Phone: +371 67039320
Fax: +371 67039318
Web page: http://www.biceps.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Campos, Nauro F & Kinoshita, Yuko, 2002.
"Foreign Direct Investment as Technology Transferred: Some Panel Evidence from the Transition Economies,"
CEPR Discussion Papers
3417, C.E.P.R. Discussion Papers.
- Campos, Nauro F & Kinoshita, Yuko, 2002. "Foreign Direct Investment as Technology Transferred: Some Panel Evidence from the Transition Economies," Manchester School, University of Manchester, vol. 70(3), pages 398-419, June.
- Nauro F. Campos & Yuko Kinoshita, 2002. "Foreign Direct Investment as Technology Transferred: Some Panel Evidence from the Transition Economies," William Davidson Institute Working Papers Series 438, William Davidson Institute at the University of Michigan.
- A. P. Thirlwall, 1997. "Reflections on the Concept of Balance-of-Payments-Constrained Growth," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 19(3), pages 377-385, April.
- Stanley Fischer & Ratna Sahay, 2000. "The Transition Economies After Ten Years," NBER Working Papers 7664, National Bureau of Economic Research, Inc.
- Hubert Hieke, 1997. "Balance-of-Payments-Constrained Growth: A Reconsideration of the Evidence for the U.S. Economy," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 19(3), pages 313-325, April.
- Christian Amplatz, 2003. "The Economic Convergence Performance of Central and Eastern European Countries," Economic Change and Restructuring, Springer, vol. 36(4), pages 273-295, December.
- Gerrard, W J & Godfrey, L G, 1998. "Diagnostic Checks for Single-Equation Error-Correction and Autoregressive Distributed Lag Models," The Manchester School of Economic & Social Studies, University of Manchester, vol. 66(2), pages 222-37, March.
- Fischer, Stanley & Sahay, Ratna & Vegh, Carlos A, 1996. "Economies in Transition: The Beginnings of Growth," American Economic Review, American Economic Association, vol. 86(2), pages 229-33, May.
- Oleh Havrylyshyn & Ron van Rooden, 2003. "Institutions Matter in Transition, But So Do Policies," Comparative Economic Studies, Palgrave Macmillan, vol. 45(1), pages 2-24, March.
- Herwartz, Helmut & Neumann, Michael H., 2005. "Bootstrap inference in systems of single equation error correction models," Journal of Econometrics, Elsevier, vol. 128(1), pages 165-193, September.
- Jonathan Perraton, 2003. "Balance of Payments Constrained Growth and Developing Countries: An examination of Thirlwall's hypothesis," International Review of Applied Economics, Taylor & Francis Journals, vol. 17(1), pages 1-22.
- Uwe Hassler & Jürgen Wolters, 2006.
"Autoregressive distributed lag models and cointegration,"
AStA Advances in Statistical Analysis,
Springer, vol. 90(1), pages 59-74, March.
- Hassler, Uwe & Wolters, Jürgen, 2005. "Autoregressive distributed lag models and cointegration," Discussion Papers 2005/22, Free University Berlin, School of Business & Economics.
- Jeremy Berkowitz & Lutz Kilian, 2000.
"Recent developments in bootstrapping time series,"
Taylor & Francis Journals, vol. 19(1), pages 1-48.
- Pleskovic, Boris & Aslund, Anders & Bader, William & Campbell, Robert, 2002. "Capacity building in economics : education and research in transition economies," Policy Research Working Paper Series 2763, The World Bank.
- Neil R. Ericsson & James G. MacKinnon, 1999.
"Distributions of error correction tests for cointegration,"
International Finance Discussion Papers
655, Board of Governors of the Federal Reserve System (U.S.).
- Neil R. Ericsson & James G. MacKinnon, 2002. "Distributions of error correction tests for cointegration," Econometrics Journal, Royal Economic Society, vol. 5(2), pages 285-318, 06.
- Neil R. Ericsson & James G. MacKinnon, 2000. "Distributions of Error Correction Tests for Cointegration," Econometric Society World Congress 2000 Contributed Papers 0561, Econometric Society.
- Jasminka Sohinger, 2005. "Growth and Convergence in European Transition Economies : The Impact of Foreign Direct Investment," Eastern European Economics, M.E. Sharpe, Inc., vol. 43(2), pages 73-94, March.
- Martin Wagner & Jaroslava Hlouskova, 2005.
"CEEC growth projections: Certainly necessary and necessarily uncertain,"
The Economics of Transition,
The European Bank for Reconstruction and Development, vol. 13(2), pages 341-372, 04.
- Martin Wagner & Jaroslava Hlouskova, 2004. "CEEC Growth Projections: Certainly Necessary and Necessarily Uncertain," Diskussionsschriften dp0403, Universitaet Bern, Departement Volkswirtschaft.
- Nauro F. Campos & Abrizio Coricelli, 2002.
"Growth in Transition: What We Know, What We Don't, and What We Should,"
Journal of Economic Literature,
American Economic Association, vol. 40(3), pages 793-836, September.
- Nauro F. Campos & Fabrizio Coricelli, 2002. "Growth in Transition: What We Know, What We Don't, and What We Should," William Davidson Institute Working Papers Series 470, William Davidson Institute at the University of Michigan.
- Campos, Nauro F & Coricelli, Fabrizio, 2002. "Growth in Transition: What we Know, What we Don't and What we Should," CEPR Discussion Papers 3246, C.E.P.R. Discussion Papers.
- Jani Bekó, 2003. "The validity of the balance-of-payments-constrained growth model for a small economy in transition: the case of Slovenia," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 26(1), pages 69-93, October.
- Li, Hongyi & Maddala, G. S., 1997.
"Bootstrapping cointegrating regressions,"
Journal of Econometrics,
Elsevier, vol. 80(2), pages 297-318, October.
- Tom Doan, . "RATS program to demonstrate bootstrapping with cointegration," Statistical Software Components RTZ00021, Boston College Department of Economics.
- Erkin I. Bairam, 1997. "Levels of Economic Development and Appropriate Specification of the Harrod Foreign-Trade Multiplier," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 19(3), pages 337-344, April.
- Jan Svejnar, 2002.
"Transition Economies: Performance and Challenges,"
Journal of Economic Perspectives,
American Economic Association, vol. 16(1), pages 3-28, Winter.
- Oleh Havrylyshyn, 2001. "Recovery and Growth in Transition: A Decade of Evidence," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 4.
- P. J. Dawson, 2003. "Financial development and growth in economies in transition," Applied Economics Letters, Taylor & Francis Journals, vol. 10(13), pages 833-836.
- Stanley Fischer & Ratna Sahay, 2000. "The Transition Economies After Ten Years," IMF Working Papers 00/30, International Monetary Fund.
- H. Sonmez Atesoglu, 1997. "Balance-of-Payments-Constrained Growth Model and Its Implications for the United States," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 19(3), pages 327-335, April.
- Mantalos, Panagiotis & Shukur, Ghazi, 1998. "Size and Power of the Error Correction Model Cointegration Test. A Bootstrap Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(2), pages 249-55, May.
- Ertugrul Deliktas & Mehmet Balcilar, 2005. "A Comparative Analysis of Productivity Growth, Catch-Up, and Convergence in Transition Economies," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 41(1), pages 6-28, January.
- Tondl, Gabriele & Vuksic, Goran, 2003. "What makes regions in Eastern Europe catching up? The role of foreign investment, human resources and geography," ZEI Working Papers B 12-2003, ZEI - Center for European Integration Studies, University of Bonn.
When requesting a correction, please mention this item's handle: RePEc:bic:journl:v:5:y:2005:i:2:p:48-65. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lelde Ivankova)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.