A note on economic growth and human capital in Eastern Europe

This paper addresses the poor economic performance of Eastern Europe in the 1990s and the future development potential of the region in the light of the theories of economic growth and human capital and their empirical tests. It concludes that Eastern Europe is likely to have fallen into a 'poverty trap' and that the way out of this trap involves tapping the growth potential derived from the region's favourable endowment with human capital and implementing growth-enhancing economic reforms.