Technological Progress and Factor Utilization in Eastern European Economic Growth

1989/11/01 by Josef C. Brada · 1 citation
Economics, Econometrics and Finance · Social Sciences · #Economic Growth and Productivity #Fiscal Policy and Economic Growth #Regional Development and Policy

paper · doi:10.2307/2554321

Abstract

Frontier production functions are estimated for the industrial sector of four East European countries: Czechoslovakia, the German Democratic Republic, Hungary, and Poland. The estimates reveal that the slowdown in industrial growth in these countries is due to a decline in the efficiency or intensity of factor utilization rather than to declining rates of growth of technological progress. In all countries, changes in the efficiency of resource utilization are found to be more responsive to changes in macroeconomic policies than to economic reforms. Finally, the amount of labor that could be displaced during cyclical downturns is estimated and found to imply potentially high levels of disguised unemployment. Copyright 1989 by The London School of Economics and Political Science.

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