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Beyond the crisis: revisiting emerging Europe’s growth model

Author

Listed:
  • Ruben Atoyan

    (International Monetary Fund, Washington)

Abstract

Focusing on the nexus between economic growth and the buildup of external vulnerabilities, this paper provides a systematic account of different growth strategies followed in Central and Eastern Europe in 2000-08 and then uses this growth diagnostics to derive implications for a post-crisis recovery. The main findings point to three policy lessons for improving growth sustainability. First, greater reliance on tradable sectors should be the cornerstone of a future growth model. Second, enhancing domestic sources of bank credit funding would contribute to the mitigation of external vulnerabilities and make the domestic financial system more resilient to global financial shocks. Third, prudential and macroeconomic policies will have to be more proactive in managing capital inflows, including funneling these inflows into investment in export-oriented industries.

Suggested Citation

  • Ruben Atoyan, 2010. "Beyond the crisis: revisiting emerging Europe’s growth model," Financial Theory and Practice, Institute of Public Finance, vol. 34(4), pages 329-356.
  • Handle: RePEc:ipf:finteo:v:34:y:2010:i:4:p:329-356
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    File URL: http://www.ijf.hr/eng/FTP/2010/4/atoyan.pdf
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    References listed on IDEAS

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    1. Ben Gardiner & Ron Martin & Tyler Peter, 2004. "Competitiveness, Productivity and Economic Growth across the European Regions," ERSA conference papers ersa04p333, European Regional Science Association.
    2. Benjamin F. Jones & Benjamin A. Olken, 2008. "The Anatomy of Start-Stop Growth," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 582-587, August.
    3. Daniel Leigh & Stefania Fabrizio & Ashoka Mody, 2009. "The Second Transition; Eastern Europe in Perspective," IMF Working Papers 09/43, International Monetary Fund.
    4. N/A, 2009. "On the Recession," Local Economy, London South Bank University, vol. 24(3), pages 253-253, May.
    5. Crespo Jorge & Martín Carmela & Velázquez Francisco J, 2004. "The Role of International Technology Spillovers in the Economic Growth of the OECD Countries," Global Economy Journal, De Gruyter, vol. 4(2), pages 1-20, December.
    6. Abdul d Abiad & Ashoka Mody & Susan M Schadler & Daniel Leigh, 2007. "Growth in the Central and Eastern European Countries of the European Union," IMF Occasional Papers 252, International Monetary Fund.
    7. Alexander Klemm, 2010. "Causes, benefits, and risks of business tax incentives," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 17(3), pages 315-336, June.
    8. Philip Schellekens & Rudolfs Bems, 2007. "Finance and Convergence; What’s Ahead for Emerging Europe?," IMF Working Papers 07/244, International Monetary Fund.
    9. An, Galina & Iyigun, Murat F., 2004. "The export skill content, learning by exporting and economic growth," Economics Letters, Elsevier, vol. 84(1), pages 29-34, July.
    10. Jesmin Rahman, 2010. "Absorption Boom and Fiscal Stance; What Lies Ahead in Eastern Europe?," IMF Working Papers 10/97, International Monetary Fund.
    11. Ceyla Pazarbasioglu & Gudrun Johnsen & Paul Louis Ceriel Hilbers & Inci Ötker, 2005. "Assessing and Managing Rapid Credit Growth and the Role of Supervisory and Prudential Policies," IMF Working Papers 05/151, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. International Monetary Fund, 2010. "Romania; Staff Report for the 2010 Article IV Consultation, Fourth Review Under the Stand-By Arrangement, and Requests for Modification and Waiver of Nonobservance of Performance Criteria—Staff Report," IMF Staff Country Reports 10/227, International Monetary Fund.
    2. repec:pal:compes:v:59:y:2017:i:4:d:10.1057_s41294-017-0037-1 is not listed on IDEAS
    3. Julia Kiraly & Atila Csajbok & Mihaly Andras Kovacs, 2011. "A Policy Recipe for Successful Convergence of CESEE Countries in the Post-crisis World," Chapters,in: Post-Crisis Growth and Integration in Europe, chapter 12 Edward Elgar Publishing.
    4. Kosta Josifidis & Radmila Dragutinović Mitrović & Olgica Ivančev, 2012. "Heterogeneity of Growth in the West Balkans and Emerging Europe: A Dynamic Panel Data Model Approach," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 59(2), pages 157-183, May.
    5. repec:taf:pocoec:v:30:y:2018:i:1:p:1-18 is not listed on IDEAS
    6. Mirjana Gligoric, 2014. "Paths Of Income Convergence Between Country Pairs Within Europe," Economic Annals, Faculty of Economics, University of Belgrade, vol. 59(201), pages 123-156, April – J.

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