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Technical Progress as a Solution for Romania and Greece to Face the Global Crisis’ Problems and the Bad Forecasts

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  • Romeo Ionescu

Abstract

The paper deals with the two Member States which were put down by the crisis: Greece and Romania. As a result, the analysis is focused on 2009-2012 time period, in order to explain the economic situation, to forecast it and to find another solution to face the crisis challenge. The first step was to analyse the possibility to define an economic model which to be able to quantify the support of the technical progress on the economic recovery. A distinct part of the paper is that regarding to the model’s equations and parameters which are used from qualified statistical surveys. The model consists of a specific production function which was defined in order to quantify the labour productivity and the fixed capital efficiency under the impact of the technical progress. This technical progress in the economy is quantified by the growth of the labour knowledge and the growth of fixed capital use degree. The economic analysis is focused on labour productivity and capital efficiency and tried to offer solutions in order to optimise the economic behaviour under crisis using the human capital stock of knowledge. The last part of the paper analyses the evolution of the fixed capital efficiency as a result of the labour knowledge growth and the evolution of the fixed capital efficiency supported by the new machines and equipments. The main conclusion of the paper is that the technical progress represents a chance for the economic recovery in Romania and Greece. Both countries have relative advantage in using their relative high skilled labour and paying lower wages caused by the crisis. But their ability to obtain benefits from these is still far away. The model used in the paper is able to offer a useful instrument of analysis in order to quantify the impact of the technical progress on the economic development. The whole analysis is based on official databases: Eurostat, IMF, World Bank and National Statistic Institutes.

Suggested Citation

  • Romeo Ionescu, 2012. "Technical Progress as a Solution for Romania and Greece to Face the Global Crisis’ Problems and the Bad Forecasts," European Research Studies Journal, European Research Studies Journal, vol. 0(2), pages 33-46.
  • Handle: RePEc:ers:journl:v:xv:y:2012:i:2:p:33-46
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    References listed on IDEAS

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    1. Stiglitz, Joseph E., 1997. "Georgescu-Roegen versus Solow/Stiglitz," Ecological Economics, Elsevier, vol. 22(3), pages 269-270, September.
    2. Avi J. Cohen, 2003. "Retrospectives: Whatever Happened to the Cambridge Capital Theory Controversies?," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 199-214, Winter.
    3. S K Mishra, 2010. "A Brief History of Production Functions," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(4), pages 6-34, November.
    4. Solow, Robert M., 1997. "Georgescu-Roegen versus Solow-Stiglitz," Ecological Economics, Elsevier, vol. 22(3), pages 267-268, September.
    5. Daly, Herman E., 1997. "Georgescu-Roegen versus Solow/Stiglitz," Ecological Economics, Elsevier, vol. 22(3), pages 261-266, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Production Function; Labor Productivity; Fixed Capital Efficiency; Technical Progress; Romania; Greece;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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