DP2654 Back to the Future: the Growth Prospects of Transition Economies Reconsidered

Author(s): Nauro F. Campos
Publication Date: December 2000
Keyword(s): Economic Growth, Growth Prospects, Transition Economies
JEL(s): E23, O40, P20, P52
Programme Areas: Transition Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=2654

How many years will the average transition economy need to reach the income level of the average OECD country? The favoured methodology in use to answer such questions is referred to as the BLR approach, because it uses specifications from Barro, and Levine and Renelt. The literature has so far refrained from identifying and testing the underlying assumptions of the BLR approach. This paper attempts to fill this gap. Our results contrast sharply with the assumptions and findings from the BLR approach, questioning its might and challenging our understanding of the transition process in its key dimension.