Beyond the Crisis; Revisiting Emerging Europeâ€™s Growth Model
Focusing on the nexus between economic growth and 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 the 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 the future growth model. Second, enhancing domestic sources of bank credit funding would contribute to mitigation of external vulnerabilities and make 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 the export-oriented industries.
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- Jesmin Rahman, 2010. "Absorption Boom and Fiscal Stance; What Lies Ahead in Eastern Europe?," IMF Working Papers 10/97, International Monetary Fund.
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- 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.
- 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.
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