Structural Reforms to Set the Growth Ambition
The effect of structural reforms on growth in Europe and Central Asia is assessed by looking separately at each supply-side channel: capital, labor, and productivity, with the last estimated using the stochastic frontier approach. By controlling fo...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/229781583758481770/Structural-Reforms-to-Set-the-Growth-Ambition http://hdl.handle.net/10986/33424 |
| Summary: | The effect of structural reforms on
growth in Europe and Central Asia is assessed by looking
separately at each supply-side channel: capital, labor, and
productivity, with the last estimated using the stochastic
frontier approach. By controlling for the interaction with
the economic cycle, the paper also investigates whether
timing matters. Improvements in human capital, regulatory
quality, and government effectiveness have the most impact
on potential growth, along with financial development.
European Union accession may also boost growth, mainly by
encouraging capital deepening. However, changes in labor
market regulation and tariffs may have ambiguous effects.
Applying the results to Serbia, the analysis demonstrates
that closing certain structural gaps with the frontier would
help boost its potential. |
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