Rapid Growth in Transition Economies: Growth-Accounting Approach
IMF Working Papers, July 1, 2007
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- Rapid Growth in Transition Economies: Growth-Accounting Approach
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Bibliographic details
- Authors: Garbis Iradian
- Published: July 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451867282.001
Summary and central findings
- The paper uses the growth-accounting approach to determine the sources of growth in transition economies.
- The central conclusion is that the estimated total factor productivity (TFP) growth for the former Soviet Union republics were significantly higher than other fast growing economies.
- A key question for prospective growth is whether the TFP gains achieved thus far have already eliminated most of the inefficiencies of central planning—and will therefore soon fade away.
- Underutilized labor combined with the recent trend of faster capital accumulation may play a more important role in the medium-term growth.
Major themes and analytical focus
- Growth-accounting methodology applied to transition economies.
- Comparison of TFP growth in the former Soviet Union republics versus other fast-growing economies.
- Examination of the roles of:
- Underutilized labor
- Capital accumulation
- Technical efficiency and physical capital
- Consideration of whether past TFP gains reflect one-time catch-up versus sustainable productivity improvements.
Subjects and keywords
- Subjects: Capacity utilization, Labor, Production growth, Productivity, Total factor productivity
- Keywords: CIS country, physical capital, technical efficiency, TFP growth, WP
Policy implications and considerations
- Monitor whether TFP growth in former Soviet republics represents residual catch-up from central-planning inefficiencies or sustainable efficiency gains.
- Consider policy measures that address:
- Labor underutilization to support medium-term growth.
- Continued capital accumulation to complement productivity improvements.
- Analytical priority: distinguish one-off TFP gains from persistent productivity drivers when forecasting prospective growth.
IMF Working Paper — "Rapid Growth in Transition Economies: Growth-Accounting Approach" by Garbis Iradian, July 1, 2007.