IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v48y2012is4p7-13.html
   My bibliography  Save this article

Transition in a Bubble Economy

Author

Listed:
  • Josef C. Brada
  • Trajko Slaveski

Abstract

Although there is a large body of literature examining the negative effects of the global financial crisis on transition economies, the global financial bubble that preceded the crisis had a large positive impact on the productive capacity of these countries, both by increasing the pace of capital formation and by accelerating the growth of productivity. At the same time, through different channels, the global bubble also ensured that there was sufficient demand for the goods produced by the new capacity, thus creating a temporary high-output equilibrium. In the future, a new growth model, one based more on domestic resources, will be needed in transition economies, and policymakers should be cautious in judging the ability of their past policies to promote good economic performance.

Suggested Citation

  • Josef C. Brada & Trajko Slaveski, 2012. "Transition in a Bubble Economy," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 48(S4), pages 7-13, November.
  • Handle: RePEc:mes:emfitr:v:48:y:2012:i:s4:p:7-13
    as

    Download full text from publisher

    File URL: http://mesharpe.metapress.com/link.asp?target=contribution&id=Y74775G34L445V77
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. PIROVANO Mara & VANNESTE, Jacques & VAN POECK, André, 2009. "Portfolio and short-term capital inflows to the new and potential EU countries: Patterns, determinants and policy responses," Working Papers 2009018, University of Antwerp, Faculty of Business and Economics.
    2. Zuzana Brixiova & Laura Vartia & Andreas Wörgötter, 2009. "Capital Inflows, Household Debt and the Boom-bust Cycle in Estonia," OECD Economics Department Working Papers 700, OECD Publishing.
    3. Arjana BREZIGAR-MASTEN & Fabrizio CORICELLI & Igor MASTEN, 2009. "Financial integration and financial development in transition economies: What happens during financial crises?," RSCAS Working Papers 2009/49, European University Institute.
    4. Mileva, Elitza, 2008. "The impact of capital flows on domestic investment in transition economies," Working Paper Series 871, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Brada, Josef C. & Gajewski, Paweł & Kutan, Ali M., 2021. "Economic resiliency and recovery, lessons from the financial crisis for the COVID-19 pandemic: A regional perspective from Central and Eastern Europe," International Review of Financial Analysis, Elsevier, vol. 74(C).
    2. El-hadj Bah & Josef C. Brada, 2014. "Labor Markets in the Transition Economies: An Overview," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 11(1), pages 3-53, June.
    3. Maciej Stefański, 2020. "To What Extent does Convergence Explain the Slowdown in Potential Growth of the CEE Countries Following the Global Financial Crisis?," KAE Working Papers 2020-058, Warsaw School of Economics, Collegium of Economic Analysis.
    4. Liudmila Malyshava, 2018. "External Instability in Transition: Applying Minsky's Theory of Financial Fragility to International Markets," Economics Working Paper Archive wp_909, Levy Economics Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Heng, Dyna, 2011. "Capital flows and real exchange rate: does financial development matter?," MPRA Paper 48553, University Library of Munich, Germany, revised May 2012.
    2. Michał Brzoza-Brzezina & Jacek Kotłowski & Kamil Wierus, 2015. "Can interest rate spreads stabilize the euro area?," Applied Economics, Taylor & Francis Journals, vol. 47(34-35), pages 3696-3709, July.
    3. Juan Carlos Cuestas & Merike Kukk, 2017. "Asymmetries in the interaction between housing prices and housing credit in Estonia," Bank of Estonia Working Papers wp2017-2, Bank of Estonia, revised 25 May 2017.
    4. Cazzavillan, Guido & Olszewski, Krzysztof, 2012. "Interaction between foreign financial services and foreign direct investment in Transition Economies: An empirical analysis with focus on the manufacturing sector," Research in Economics, Elsevier, vol. 66(4), pages 305-319.
    5. Kose,Ayhan & Ohnsorge,Franziska Lieselotte & Ye,Lei Sandy & Islamaj,Ergys, 2017. "Weakness in investment growth : causes, implications and policy responses," Policy Research Working Paper Series 7990, The World Bank.
    6. Grigor Stoevsky, 2015. "Exports and foreign direct investment as factors for economic growth in the EU New Member States," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 92-111,112-.
    7. Cristina Jude, 2019. "Does FDI crowd out domestic investment in transition countries?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 27(1), pages 163-200, January.
    8. Sandrine LEVASSEUR, 2012. "Labour market adjustments in Estonia during the 2008/2011 crisis," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 3, pages 123-143, June.
    9. Annageldy Arazmuradov, 2012. "Foreign Aid, Foreign Direct Investment, and Domestic Investment Nexus in Landlocked Economies of Central Asia," Economic Research Guardian, Weissberg Publishing, vol. 2(1), pages 129-151, May.
    10. Kim Sujin, 2018. "Investment Puzzle: Deeper Roots," Working Papers id:12433, eSocialSciences.
    11. Ahliman Abbasov, 2019. "Pooled Mean Group Approach to Test the Determinants of Financial Integration: Evidence From OECD and G20 Countries," Research in World Economy, Research in World Economy, Sciedu Press, vol. 10(3), pages 366-370, December.
    12. Michał Brzoza-Brzezina & Pascal Jacquinot & Marcin Kolasa, 2014. "Can We Prevent Boom-Bust Cycles During Euro Area Accession?," Open Economies Review, Springer, vol. 25(1), pages 35-69, February.
    13. Ivanović, Igor, 2015. "Impact of foreign direct investment (FDI) on domestic investment in Republic of Croatia," MPRA Paper 70076, University Library of Munich, Germany.
    14. Samia Nasreen & Sofia Anwar, 2020. "Financial Stability And The Role Of Economic And Financial Integration In South Asia: Evidence From Time-Series Data," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 65(02), pages 303-333, March.
    15. Jarko Fidrmuc & Reiner Martin, 2011. "FDI, Trade and Growth in CESEE Countries," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 70-89.
    16. repec:spo:wpecon:info:hdl:2441/eu4vqp9ompqllr09iak4591pm is not listed on IDEAS
    17. repec:hal:wpspec:info:hdl:2441/eu4vqp9ompqllr09iak4591pm is not listed on IDEAS
    18. Annageldy Arazmuradov, 2015. "Can Development Aid Help Promote Foreign Direct Investment? Evidence from Central Asia," Economic Affairs, Wiley Blackwell, vol. 35(1), pages 123-136, February.
    19. Sabine Herrmann & Adalbert Winkler, 2009. "Financial markets and the current account: emerging Europe versus emerging Asia," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 145(3), pages 531-550, October.
    20. Sasidaran Gopalan & Alice Ouyang & Ramkishen S. Rajan, 2018. "Impact of Greenfield FDI versus M&A on growth and domestic investment in developing Asia," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(1), pages 41-70, April.
    21. Željko Bogdan & Milan Deskar-Škrbić & Velimir Šonje, 2014. "International capital flows and economic growth in CESEE: a structural break in the great recession," EFZG Working Papers Series 1404, Faculty of Economics and Business, University of Zagreb.
    22. Christian Saborowski, 2009. "Capital Inflows and the Real Exchange Rate: Can Financial Development Cure the Dutch Disease?," IMF Working Papers 2009/020, International Monetary Fund.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:48:y:2012:i:s4:p:7-13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.