Publication
Title
Reform reversals and output growth in transition economies
Author
Abstract
This paper tests whether reform reversals during transition carry an economic cost. Reform is measured by an average reform index, while reform reversals are characterized by a drop in the average reform index. In the standard empirical framework the current level of reform affects growth negatively, while the lagged level affects growth positively. This non-linear effect implies a counterintuitive, short-lived positive effect of a reversal. In a simultaneous equation system with growth and the level of reform as dependent variables we explicitly introduce a reversal parameter. Empirical results suggest that reversals have an immediate negative impact on real output growth. Controlling for the level of reform shows that reversals are more costly at higher levels of reform.
Language
English
Source (journal)
The economics of transition / European Bank for Reconstruction and Development. - Oxford
Publication
Oxford : 2003
ISSN
0967-0750 [print]
1468-0351 [online]
Volume/pages
11:4(2003), p. 649-669
ISI
000187462100003
Full text (Publisher's DOI)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
Web of Science
Record
Identification
Creation 23.08.2016
Last edited 12.06.2017
To cite this reference