Rapid Growth in the CIS: Is It Sustainable?
This paper analyses some of the main factors behind the recent rapid growth in the Commonwealth of Independent States (CIS) and the prospects for its continuation. Two approaches are used. The first approach uses growth accounting exercises to estimate the total factor productivity (TFP) growth of all transition economies and compare them with other fast-growing economies. The second approach uses panel regression to estimate the determinants of per capita and TFP growth for 90 countries. Both short-run and long run coefficients are estimated using fixed effects, random effects, and two stage least squares (2SLS) econometric techniques. The central conclusion of the study is that the rapid growth of the CIS countries over the past six years has been driven primarily by improvement in labour productivity, increases in capacity utilization, recovery of previously lost output, favourable commodity prices, and large increases in remittances. This strong growth may continue over the next few years. Why? First, the still relatively low real GDP base and low average per capita means that there is more catch-up potential. Second, the recent trend of faster capital accumulation is expected to play a more important role in the medium-term growth. Third, education levels are relatively much higher than in other regions. There is a downside risk, however, arising from the high concentration of exports in a few commodities. The undiversified export structure and the terms-of-trade gains may expose the CIS countries to considerable external risks. The challenge, therefore, will be to improve the investment climate in the non-primary sectors. Improving the investment climate will require further progress in implementing structural reform and strengthening institutional development. The undiversified export structure and the terms-of-trade gains may expose the CIS countries to considerable external risks. As time passes, the share of growth derived from improved resource allocation may diminish gradually and long-term rapid growth will be increasingly dependent on physical and human capital accumulation.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Length:||81 pages including 24 Tables and 11 Figures|
|Date of creation:||Feb 2007|
|Date of revision:|
|Publication status:||Published as wiiw Research Report|
|Contact details of provider:|| Postal: |
Phone: (+43-1) 533 66 10
Fax: (+43-1) 533 66 10-50
Web page: http://www.wiiw.ac.at
More information through EDIRC
|Order Information:||Web: http://wiiw.ac.at|
When requesting a correction, please mention this item's handle: RePEc:wii:rpaper:rr:336. 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: (Customer service)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 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.