Assessing Eastern Europe's Capital Needs
February 1, 1992
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Summary
The paper aims at assessing the capital needs of Eastern Europe in catching up to EC standards of living using the framework of a CES (constant elasticity of substitution) production function model. This function, parameterized on the EC, is assumed to apply with certain inefficiency factors in Eastern Europe in 1992. Quantitative results, given the heroic set of assumptions required, are bounded by large ranges. The approach provides a framework for assessing the factors which will determine the future capital needs in Eastern Europe and underscores the crucial role of efficiency gains in this process.
Subject: Exchange rates, Financial institutions, Foreign exchange, Income, Labor, National accounts, Purchasing power parity, Stocks
Keywords: capital, Eastern Europe, EC average, EC catch up, EC efficiency level, EC level, EC production function, EC standards of living, Exchange rates, Income, labor ratio, Purchasing power parity, rate of return, Stocks, WP
Pages:
24
Volume:
1992
DOI:
Issue:
012
Series:
Working Paper No. 1992/012
Stock No:
WPIEA0121992
ISBN:
9781451842821
ISSN:
1018-5941
Notes
Also published in Staff Papers, Vol. 39, No. 4, December 1992.
