Original scientific paper

Beyond the crisis: revisiting emerging Europe’s growth model

Ruben Atoyan ; International Monetary Fund, Washington

Abstract

Focusing on the nexus between economic growth and the buildup of external vulnerabilities, this paper provides a systematic account of different growth strategies followed in Central and Eastern Europe in 2000-08 and then uses this growth diagnostics to derive implications for a post-crisis recovery. The main findings point to three policy lessons for improving growth sustainability. First, greater reliance on tradable sectors should be the cornerstone of a future growth model. Second, enhancing domestic sources of bank credit funding would contribute to the mitigation of external vulnerabilities and make the domestic financial system more resilient to global financial shocks. Third, prudential and macroeconomic policies will have to be more proactive in managing capital inflows, including funneling these inflows into investment in export-oriented industries.

Keywords

sustainable economic growth; sources of growth; external vulnerabilities

Hrčak ID:

63164

URI

https://hrcak.srce.hr/63164

Publication date:

2.12.2010.

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