There are at least three reasons why many transition economies succeeded by pursuing policies that are very different from radical economic liberalization (shock therapy), which is normally credited for the economic success of Central European countries. First, optimal policies are context dependent, specific for each stage of development, so what worked in Slovenia cannot be expected to work in Mongolia. Second, even for countries at the same level of development, reforms needed to stimulate growth are different; they depend on the previous history and on the path chosen. The reduction of government expenditure as a share of GDP did not undermine significantly the institutional capacity of the state in China, but in Russia and other CIS states it turned out to be ruinous. It is the growth diagnostics that should reveal the missing ingredient of economic growth. Introducing this “missing ingredient” should not, however, result in the destruction of other pre-conditions for growth. The art of the policymaker is to create markets without causing government failure, like it happened in many CIS countries. Third and most importantly, there are long-term trajectories of development that are path dependent: once the country gets on a particular trajectory, it is sometimes better to stay on track because the costs of a transition to a seemingly superior trajectory may be prohibitively high.
Ukraine belongs among those young countries where the beginnings of democratisation and nation-building approximately coincided. While the development of nation states in Central Europe was usually preceded by the development of nations, the biggest dilemma in the Ukraine is whether a nation-state programme — parallel to the aim of state-building — is able to bring unfinished nation-building to completion. Ukraine sways between the EU and Russia with enormous amplitude. The alternating orientation between the West and the East can be ascribed to superpower ambitions reaching beyond Ukraine. Eventually, internal and external determinants are intertwined and mutually interact with one another. The aim of the paper is to explain the dilemmas arising from identity problems behind the Ukraine’s internal and external orientation.
The Central and Eastern European new Member States of the European Union (CEECs) went through the transition process following the commandments of the Washington Consensus, which gradually evolved into the “integrative growth model”. External liberalisation exposed the CEECs to recurring problems over external imbalances, bubbles driven by capital inflows, and resulting growth instabilities. Large foreign direct investment inflows attracted by repressed wages and low taxes do not accelerate growth. Arguably, real convergence would be much faster under a system with built-in limitations to free trade, free capital movements – and with more scope for traditional industrial, trade, incomes, and fiscal policies.
In 1998, the European Union (EU) entered into negotiations with Cyprus, the Czech Republic, Estonia, Hungary, Poland and Slovenia concerning the enlargement of the Union. At the end of 1999, the European Commission decided that six other countries could join the negotiations in 2000 (Bulgaria, Lithuania, Latvia, Slovakia, Malta and Romania), and it was suggested that a decision concerning the date of membership would be taken in 2002 for these applicants fulfilling all the criteria. Many questions still remain on both sides, in particular regarding institutional reform of the EU (Festoc, 1998), and the ability of the Central and Eastern European countries to adopt the “acquis”.
In this article, we shall evaluate the ways in which the Central European countries (Poland, Hungary and the Czech Republic — the CECs) have already integrated to the Western European economy, using trade data over the last ten years. First, we show that since the beginning of the transition, a feature of the foreign trade of the CECs has been a strong reorientation from East to West, in particular to Germany, together with a rapid growth in trade between the EU and the CECs. Second, we describe the trade structure, focussed on foreign direct investment as a mean of developing new exports. The third and fourth sections study the development of the specialisations of the CECs and the nature of trade between the CECs and the EU respectively.
We investigate the relationship between economic growth and real exchange rate (RER) misalignments within the European Union (EU) during the period of 1995–2016. In addition to the relative price level of GDP, we quantify an alternative indicator for the RER: the internal relative price of services to goods. We interpret RER misalignments as deviations from the levels consistent with the levels of economic development among the EU countries. Using pooled OLS and dynamic panel techniques, we find that within the EU over- (under-) valuations are associated with lower (higher) growth. This is mainly due to developments in the countries operating under the fixed exchange rate regimes. Our results indicate that the level of development does not influence the strength of the growth-misalignment relationship within the EU. Regarding the price level of GDP, we find that the positive relationship between undervaluation and growth diminishes with the degree of undervaluation. We find that overvaluation has a statistically significant negative effect on export market shares and private investments, indicating that both the competitiveness and the investment channels play a role in the relationship between growth and RER misalignments. As an extension, we show that the effects of “wage misalignments” from levels consistent with productivity are also negatively related to economic growth. The policy implications of the analysis point to the importance of a growth strategy avoiding overvaluation on the one hand, and to the futility of aiming at excessive undervaluation, on the other.
Analysis into the sources of lower levels of national productivities between Central and Eastern European economies and the European Union is scarce and lacks comparability. These sources are assessed by analysing the role played by sectoral structures. After providing a brief overview of comparative levels of economy-wide labour productivity between the EU-15 average, selected EU cohesion countries and the EU accession countries of Estonia, Poland, the Czech and Slovak Republics, Hungary and Slovenia, a quantitative account of the sectoral content of the national productivity gap is calculated. The paper develops a method to calculate the explanatory power of patterns of sectoral structures for the size of the productivity gap by hypothetically applying average EU-15 sectoral patterns on Central and Eastern European economies’ sectoral productivities. Subsequently, the respective roles of individual sectors in explaining the national productivity gaps are calculated by assigning weights to sectoral productivity gaps relative to their employment shares. These results are then carefully assessed in terms of potentials and prospects for swift and complete productivity catch-up and in terms of the most efficient policies to assist productivity convergence.
This essay joins in the international controversy about the nature and sustainability of the economic system in China. While official ideology continues to stick to the concept of ‘socialist market economy,’ albeit with changing contents, international observers are split. One group considers China as a de facto market economy, which is in line with the top-down tradition of ruling in the region. Others consider it as a sui generis system. And a third line takes it as yet another case of hybrid regime which proliferated globally in the new millennium. I try to create a link between these readings and the empirics of Chinese growth. This may help interpret the slowdown, exacerbated by the COVID-19 epidemics on Chinese output.
The angular variation of an irradiating flux around the cylindrical axis of a 3 Ci /11.1x1010 Bq/241Am–9Be neutron source has been investigated. Measurements using the27Al/n,p/27Mg reaction indicated a flux variation of up to 12% from the mean following a 2 rotation about the cylindrical axis.
The organic and mineral composition of selected samples from boreholes P-24, P-27 and P-26 of the oil deposit El Iusr, in the Suez Channel region, were characterized by DTA and TG supplemented by X-ray and luminescence-bituminous studies.
The 14 MeV neutron activation facility of the Hohenheim University is described and the calculated determination limits for
20 elements are presented. The determination of aluminium via the27Al(n, p)27Mg reaction and of silicon by the28Si(n, p)28Al reaction is applied to the analysis of atmospheric aerosols. A running program for routine analyses was elaborated. The
method was checked with the aid of an intercomparison sample.