Growth, Reform Indicators and Policy Complementarities

24 Pages Posted: 14 Mar 2008

See all articles by Jorge Braga de Macedo

Jorge Braga de Macedo

New University of Lisbon - Faculdade de Economia; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Joaquim Oliveira Martins

OECD; University Paris-Dauphine - PSL

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Abstract

In order to assess the growth implications of policy complementarities, this paper applies second-best results to reform indicators. During the transition from central planning to EU integration, which corresponds to a policy cycle, a complementarity index based on structural indicators compiled by the European Bank for Reconstruction and Development (EBRD) decreases and then increases while the level of reforms tends to rise throughout. Corrected for initial conditions, the extent of macroeconomic stabilization and endogeneity, the level of reforms and changes in their complementarity are found to be positively related to output growth. The study uses panel data for 27 countries between 1989 and 2004.

Suggested Citation

Braga de Macedo, Jorge and Oliveira Martins, Joaquim, Growth, Reform Indicators and Policy Complementarities. Economics of Transition, Vol. 16, Issue 2, pp. 141-164, April 2008, Available at SSRN: https://ssrn.com/abstract=1105996 or http://dx.doi.org/10.1111/j.1468-0351.2008.00323.x

Jorge Braga de Macedo (Contact Author)

New University of Lisbon - Faculdade de Economia ( email )

Campus de Campolide
Lisboa, 1099-032
Portugal

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
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Centre for Economic Policy Research (CEPR) ( email )

London
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Joaquim Oliveira Martins

OECD ( email )

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France
+33 1 45 24 88 53 (Phone)

HOME PAGE: http://www.oecd.org/cfe

University Paris-Dauphine - PSL ( email )

PARIS
France

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