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Extending The Augmented Solow Growth Model To Explain Transitional Economies

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  • Polimeni, John M.

    (Department of Humanities and Social Sciences, Albany College of Pharmacy, 106 New Scotland Avenue, Albany, NY 12208, United States of America)

  • Iorgulescu Polimeni, Raluca

    (Department of Economics, Siena College, 515 Loudon Road, Loudonville, NY 12211, United States of America)

  • Trees, W. Scott

    (Department of Economics, Siena College, 515 Road, Loudonville, NY 12211, United States of America)

Abstract

The development of countries in economic transition is often misunderstood. These countries are neither underdeveloped nor are they developed, they are somewhere in between. Therefore, macroeconomic models of transitional economies must include aspects of both underdeveloped and developed countries. Two such variables that should be included are institutions and learning-by-doing. Institutions that are established in the society are important because they can either hinder or accelerate economic growth. Just as important for transitional economies is learning-by-doing, as it takes time to learn how a new economic system works. This paper presents a macroeconomic model for transitional economies that extends the Augmented Solow Growth Model to incorporate learning-by-doing and institutions.

Suggested Citation

  • Polimeni, John M. & Iorgulescu Polimeni, Raluca & Trees, W. Scott, 2007. "Extending The Augmented Solow Growth Model To Explain Transitional Economies," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 4(1), pages 65-76, March.
  • Handle: RePEc:rjr:romjef:v:4:y:2007:i:1:p:65-76
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    1. Josip Tica & Viktor Viljevac, 2020. "Thirty Years After: Economic Growth in Transition Countries," EFZG Working Papers Series 2005, Faculty of Economics and Business, University of Zagreb.

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    More about this item

    Keywords

    Solow growth model; transitional economies; economic development;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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