This paper has two objectives a real business cycle model is analyzed for panel data over a short time period and the Central European transition experience is explained by RBC theory. In particular, the catch-up process of transition economies to the Western European level of development is...

This paper looks at the relation between foreign direct investment (FDI) and gross fixed capital formation in transition countries as well as other sources of capital formation financing, namely debt financing, capital market financing and subsidies. The paper shows that capital formation is...