Determinants of Growth in the Central and Eastern European EU Member States - A Production Function Approach

52 Pages Posted: 21 Apr 2007

See all articles by Olga Arratibel

Olga Arratibel

European Central Bank (ECB)

Frigyes Ferdinand Heinz

European Central Bank (ECB)

Reiner Martin

Joint Vienna Insitute; European Central Bank (ECB)

Marcin Przybyla

European Central Bank (ECB)

Roberta Serafini

European Central Bank (ECB)

Tina Zumer

European Central Bank (ECB)

Lukasz Rawdanowicz

CASE - Center for Social and Economic Research

Date Written: April 2007

Abstract

Overall, the prospects for a continued and reasonably fast real convergence process between the EU8 countries and the euro area are good. However, the continuation of the rapid progress made by many EU8 countries in the past cannot be taken for granted. In fact, in order to ensure that fast economic growth in the EU8 countries remains sustainable, it is crucial for these economies to take appropriate policy action. First it is important to recall that sound macroeconomic policies including credible monetary policy and appropriate fiscal policy are essential to ensure the appropriate framework conditions for further growth and convergence. Second, they need to address structural labour market problems, in particular by reducing regional and skill mismatches. Third, they must make further efforts to improve the business environment, in order to ensure that the capital accumulation process continues and R&D investments increase. Many of the above-mentioned facets of growth-enhancing policy will also help to ensure a continued inflow of foreign direct investment (FDI), which in turn is expected to help accelerate the convergence process.

Keywords: Growth, production function

Suggested Citation

Arratibel, Olga and Heinz, Frigyes Ferdinand and Martin, Reiner and Przybyla, Marcin and Serafini, Roberta and Zumer, Tina and Rawdanowicz, Lukasz, Determinants of Growth in the Central and Eastern European EU Member States - A Production Function Approach (April 2007). ECB Occasional Paper No. 61, Available at SSRN: https://ssrn.com/abstract=977351

Olga Arratibel (Contact Author)

European Central Bank (ECB) ( email )

Eurotower
Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany
0049 69 13440 (Phone)
0044 69 1344 6000 (Fax)

Frigyes Ferdinand Heinz

European Central Bank (ECB) ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany
8219 (Phone)
6320 (Fax)

Reiner Martin

Joint Vienna Insitute ( email )

Mariahilferstrasse 97
Wien, A-1090
Austria

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Marcin Przybyla

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Roberta Serafini

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Tina Zumer

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Lukasz Rawdanowicz

CASE - Center for Social and Economic Research ( email )

Al. Jana Pawła II 61/212
00-944 Warsaw, 01-031
Poland

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