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The Austrian Miracle - Revisited: Testing eight Explanations for High Growth and maybe a ninth

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Listed author(s):
  • Martin Zagler

    ()

    (Department of Economics, Vienna University of Economics & B.A.)

Abstract

This paper is a first attempt to empirically evaluate some competing hypotheses for the Austrian growth performance. We find that the real appreciations, gross investment, a low duration of unemployment and high youth employment exhibit a significant influence on economic growth. This validates the hard currency policy hypothesis, the macroeconomic management hypothesis, and the microinstitutions hypothesis, whilst all other fail according to this exercise. In particular, we find the Schulmeister-thesis of loose money and the deficit spending hypothesis are even counterfactual. Summarizing, we find that economic policy had its share in promoting growth in the Austrian economy. As a byproduct from our analysis, we find that low levels of unemployment have a significant and positive impact on the growth rate of real GDP, which calls for further theoretical research in this direction.

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File URL: http://www.wu-wien.ac.at/inst/vw1/gee/papers/gee!wp11.pdf
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Paper provided by Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness in its series Working Papers with number geewp11.

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Date of creation: Apr 2000
Handle: RePEc:wiw:wiwgee:geewp11
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Web page: http://www.wu.ac.at/economics/en

Keywords: Economic Growth; Growth Determinants; Extreme Bounds Test; CDF-Test; Austria;

Find related papers by JEL classification:

  • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
  • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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  1. Barro, Robert J, 1999. "Notes on Growth Accounting," Journal of Economic Growth, Springer, vol. 4(2), pages 119-137, June.
  2. Marin, Dalia, 1992. "Is the Export-Led.Growth Hypothesis Valid for Industrialized Countries?," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 678-688, November.
  3. Leamer, Edward E, 1983. "Let's Take the Con Out of Econometrics," American Economic Review, American Economic Association, vol. 73(1), pages 31-43, March.
  4. Peter Brandner & Leopold Diebalek & Helene Schuberth, 1998. "Structural Budget Deficits and Sustainability of Fiscal Positions in the European Union," Working Papers 26, Oesterreichische Nationalbank (Austrian Central Bank).
  5. Sala-i-Martin, Xavier, 1997. "I Just Ran Two Million Regressions," American Economic Review, American Economic Association, vol. 87(2), pages 178-183, May.
  6. Alan S. Blinder, 1999. "Central Banking in Theory and Practice," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522608, July.
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Cited by:

  1. Ernest Gnan & Jürgen Janger & Johann Scharler, 2004. "Determinants of Long-Term Growth in Austria – A Call for a National Growth Strategy," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 23-46.

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