Emerging Europe: Refining the Growth Model to Support Sustainable Convergence

Abstract

In the past decade, there have been marked differences across countries in Europe in real per capita GDP growth. Growth rates have ranged from close to zero in Italy and Portugal to more than four per cent in Albania, Lithuania, Moldova, Russia and Ukraine (Figure 4.1, Table 4.1). Countries in emerging Europe have generally grown faster than countries in advanced Europe — most of the countries on the left-hand side of Figure 4.1 are advanced countries, while those on the right-hand side are all emerging market countries. Emerging European countries grew rapidly as they adopted institutions similar to those in advanced Europe and benefited from higher investment rates, partly financed by intra-European capital flows.