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Welfare against growth gains in post-transition countries: What are the consequences for stability?

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  • Lissowska, Maria

Abstract

This paper discusses the underpinnings of the financial crisis of the last decade in post-transition countries. It explores the endogenous reasons of this crisis, and in particular a possible link between delayed and unequal growth of household incomes on the one hand and the instability of the growth and depth of recession after the financial crisis on the other. It indicates possible factors underpinning the rapidly growing indebtedness of households, enabling faster, but unsustainable growth in consumption. Furthermore, it claims also that the artificially boosted growth of consumption and a favourable proportion between wages and profits could attract investment (also FDI), possibly searching for short-term gains. It underlines that while the inflow of financial funds was the major reason for unstable growth in this region, endogenous factors also contributed.

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  • Lissowska, Maria, 2014. "Welfare against growth gains in post-transition countries: What are the consequences for stability?," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-37.
    • Handle: RePEc:zbw:ifweej:201413
    DOI: 10.5018/economics-ejournal.ja.2014-13
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    Cited by:

    1. Rebecca Jean Emigh & Cynthia Feliciano & Corey O’Malley & David Cook-Martín, 2018. "The Effect of State Transfers on Poverty in Post-Socialist Eastern Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(2), pages 545-574, July.
    2. Renat Butabaev, 2015. "There is no growth without change - policy implications for transition economies," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 11(1), pages 69-84.
    3. Disoska Elena Makrevska, 2016. "Re-shaping the Model of Economic Growth of the CEE Countries," TalTech Journal of European Studies, Sciendo, vol. 6(2), pages 137-159, October.

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    More about this item

    Keywords

    Welfare; post-transition economies; crisis; stability;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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