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Economic Growth in Croatia: Potential and Constraints

Author

Listed:
  • David Moore

    (International Monetary Fund, Washington)

  • Athanasios Vamvakidis

    (International Monetary Fund, Washington)

Abstract

This paper examines the factors and constraints that affect recent and potential growth in Croatia, as well as policies that can influence it. On current productivity trends, it estimates Croatia’s potential growth rate at 4–41 percent, a result reasonably robust to different methodologies. For growth to be sustained at a significantly higher rate, the business environment needs to be improved through further measures to reduce the administrative burden, legal uncertainties, and corruption. The analysis also emphasizes the importance of attracting more greenfield foreign direct investment, and reforms to reduce the role of the state in the economy through fiscal consolidation and faster privatization.

Suggested Citation

  • David Moore & Athanasios Vamvakidis, 2008. "Economic Growth in Croatia: Potential and Constraints," Financial Theory and Practice, Institute of Public Finance, vol. 32(1), pages 1-28.
    • Handle: RePEc:ipf:finteo:v:32:y:2008:i:1:p:1-28
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    File URL: http://www.ijf.hr/eng/FTP/2008/1/moore.pdf
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    References listed on IDEAS

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    4. Fischer, Stanley, 1993. "The role of macroeconomic factors in growth," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 485-512, December.
    5. International Monetary Fund, 2007. "Republic of Croatia: Selected Issues," IMF Staff Country Reports 2007/082, International Monetary Fund.
    6. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1.
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    1. repec:arp:sjbmms:2021:p:35-45 is not listed on IDEAS
    2. Mr. Athanasios Vamvakidis, 2008. "Convergence in Emerging Europe: Sustainability and Vulnerabilities," IMF Working Papers 2008/181, International Monetary Fund.
    3. Thorvaldur Gylfason & Eduard Hochreiter, 2011. "Growing Together: Croatia and Latvia," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 53(2), pages 165-197, June.

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    More about this item

    Keywords

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    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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