Growth, Reform Indicators and Policy Complementarities
FEUNL Working Paper No. 484
24 Pages Posted: 3 Jul 2006
Date Written: July 2006
Abstract
This paper discusses the design of structural policies by relating second-best results and the complementarity of reforms. It computes a complementarity index based on structural reform indicators compiled by the EBRD for transition countries, assuming that the run-up to EU integration corresponds to a nearly complete policy cycle. Using econometric panel estimates, the level of reforms and changes in their complementarity are found to be positively related to output growth, corrected for endogeneity, and given initial conditions and the extent of macroeconomic stabilisation.
Keywords: Second-best, Complementarity, structural reforms, reform
JEL Classification: P2, O40, C33
Suggested Citation: Suggested Citation
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