Discussion Paper

No. 2012-65 | December 21, 2012
Welfare against Growth Gains in Post-Transition Countries. What Are the Consequences for Stability?

Abstract

This paper discusses the underpinnings of the financial crisis of the last decade. It explores the endogenous reasons of this crisis, and in particular a possible link between delayed and unequal growth of household incomes in post-transition countries on one hand and the instability of their growth and depth of recession after the financial crisis on the other. It indicates possible microeconomic factors under-pinning rapidly growing indebtedness of households, enabling faster consumption growth, but subject to fluctuations. It claims also that 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 the inflow of financial funds contributed to, but did not cause instability growth in this region.

Paper submitted to the special issue
Economic Perspectives Challenging Financialization, Inequality and Crises

JEL Classification

I38 J48 P51

Cite As

Maria Lissowska (2012). Welfare against Growth Gains in Post-Transition Countries. What Are the Consequences for Stability?. Economics Discussion Papers, No 2012-65, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2012-65

Assessment



Comments and Questions


Anonymous - Referee Report 1
January 07, 2013 - 10:38

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Kazimierz Kuciński - Invited Reader Comment
January 10, 2013 - 08:45

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Anonymous - Invited Reader Comment
January 21, 2013 - 08:52

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Anonymous - Invited Reader Comment
January 21, 2013 - 08:53

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Anonymous - Referee Report 2
January 22, 2013 - 08:42

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Anonymous - Invited Reader Comment
February 04, 2013 - 09:32

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Anonymous - Invited Reader Comment
February 11, 2013 - 08:49

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Anonymous - Invited Reader Comment
February 11, 2013 - 08:50

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Anonymous - Anonymous - Invited Reader Comment
February 11, 2013 - 16:59

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Wladimir Andreff - Invited Reader Comment
February 14, 2013 - 10:06

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Maria Lissowska - Revised Version
October 08, 2013 - 12:15

see attached file