External Factors of Economic Growth

In the context of increasing interrelatedness of economies, foreign trade and capital flows may prove crucial when considering their growth perspectives. This assertion is corroborated by contrasting growth experiences of the Baltic and Central Asian transition economies, which have undergone significant transformations in terms of their economic structure and trade patterns since the early 1990s. This book inquires into the role external factors play in the process of economic growth in the transition economies of the Baltics and Central Asia. With the help of the 'balance of payments constrained growth' model, the economies in question are compared in terms of their growth constituents' contributing shares. The author infers that higher growth rates observed in the Baltic economies - compared to those in the Central Asian economies - in the period from 1994 to 2005 are due to larger values of a compound of exports growth, capital inflows and relative price developments. Growth differences within the two regions are explained in a similar manner. This book may equally be of interest to practicing professionals and those from academia.