Savings, Investment, and Growth in Eastern Europe

Author/Editor:

Peter J Montiel ; Eduardo Borensztein

Publication Date:

June 1, 1991

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Even modest investment rates may achieve satisfactory rates of growth in the reforming economies of Eastern Europe because their relative capital scarcity implies high rates of productivity for capital. The most serious obstacle to private investment is uncertainty about the reform process, which can potentially rule out all but the most profitable projects. This problem sharply increases the payoff from accelerating the structural reform process. Regarding savings, critical aspects are the changes in methods of financing resulting from economic reform, and the availability of foreign savings, both in the form of loans and foreign direct investment.

Series:

Working Paper No. 91/61

Subject:

English

Publication Date:

June 1, 1991

ISBN/ISSN:

9781451964950/1018-5941

Stock No:

WPIEA0611991

Format:

Paper

Pages:

35

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