IDEAS home Printed from https://ideas.repec.org/p/sti/wpaper/013-2007.html
   My bibliography  Save this paper

Uncertainty and growth: the case of transition economies

Author

Listed:
  • Andrej Susjan

    (Faculty of Economics, University of Ljubljana, Slovenia)

  • Tjasa Redek

    (Faculty of Economics, University of Ljubljana, Slovenia)

Abstract

The paper investigates the relationship between fundamental uncertainty, a recurrent theme in post-Keynesian economic literature, and economic performance in transition economies. Uncertainty in the transitional economic environment is enhanced by factors such as institutional transformation, political and social instability, and legacies of the past. To capture the changes in the levels of uncertainty, the authors have designed the uncertainty index, based on a weighted selection of Heritage Foundation and Freedom House data. The correlation between the uncertainty index and growth is strong and clearly negative. Panel data analysis based on a growth model, supplemented by variables to simulate transitional cycle, and performed on a sample of transition economies for the period 1995-2002, confirms that uncertainty has a negative impact on economic growth.

Suggested Citation

  • Andrej Susjan & Tjasa Redek, 2007. "Uncertainty and growth: the case of transition economies," SCEME Working Papers: Advances in Economic Methodology 013/2007, SCEME.
  • Handle: RePEc:sti:wpaper:013/2007
    as

    Download full text from publisher

    File URL: http://www.sceme.org.uk/wps/SCEME013_Susjan_2007.pdf
    Download Restriction: no

    More about this item

    Keywords

    uncertainty; economic transition; institutions; economic growth; foreign direct investment;

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
    • P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sti:wpaper:013/2007. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Matthias Klaes). General contact details of provider: http://edirc.repec.org/data/scemeuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.