Towards a new growth model in CESEE : convergence and competitiveness through smart, green and inclusive investment

Áron Gereben, Patricia Wruuck

This paper focuses on the growth and convergence of Central, Eastern and South-Eastern European EU countries (CESEE). We argue that the factors behind the pre-crisis growth model of the region - skilled yet affordable labour force, foreign direct investment, imports of productivity-enhancing technology - are petering out, and are yet to be substituted. We propose a new growth model centred around a shift towards more home-grown innovation, digitalisation, climate change mitigation and a strong focus on skills, labour and social inclusion to leave the middle income trap behind for good and to boost economies' growth prospects in a post-COVID world. Based on analysis of firm-level data, we highlight the prerequisites of making this transition happen.

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Year of publication:	February 2021
Authors:	Gereben, Áron ; Wruuck, Patricia
Publisher:	Luxembourg : European Investment Bank
Subject:	climate change \| convergence \| economic policy \| digitalisation \| innovation \| labourmarket \| long-term growth \| productivity \| skills \| Wirtschaftliche Konvergenz \| Economic convergence \| Wirtschaftswachstum \| Economic growth \| EU-Staaten \| EU countries \| Innovation \| Klimawandel \| Climate change \| Nachhaltige Entwicklung \| Sustainable development \| Endogenes Wachstumsmodell \| Endogenous growth model \| Digitalisierung \| Digitization \| Produktivität \| Productivity \| Wachstumstheorie \| Growth theory \| Wirtschaftspolitik \| Economic policy \| Technischer Fortschritt \| Technological change \| Welt \| World