Empirica – Journal of European Economics

Sponsored by the Austrian Economic Association and the Austrian Institute of Economic Research

Empirica publishes empirical and theoretical work on all economic aspects of European Integration. The topics may range from all challenges concerning the deepening of the European Union (Single Market, Lisbon Agenda, EMU) to enlargement and the external relations of the EU (globalisation).

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Hubert Gabrisch
The long-run properties of the Kaldor-Verdoorn law: a bounds test approach to a panel of Central and East European (CEE) countries
Empirica, 2021, 48(1), pp.101-121, http://www.springer.com/10663
This study attempts to identify the short- and long-run components of the Kaldor-Verdoorn law (KV law). The law claims that demand dynamics drive productivity dynamics. The claim is tested with a panel of ten Central and Eastern European countries, where productivity and demand growth have been slowing since 2004-2006 and where fears of an end of convergent growth are spreading. Meanwhile, the gradual slowing of output and productivity growth applies not only to the region considered, but it is also a global phenomenon that is occurring despite remarkable technical progress and that is referred to as the productivity puzzle. However, this puzzle would be solved in light of the KV law. To test for its long-term properties, panel cointegration models with autoregressive distributed lags are applied. Our results confirm the law for the region; slower productivity growth is not due to "adverse technological progress" but to weakening external and domestic demand, which might block the implementation of product and process innovations.
Research group:Industrial Economics, Innovation and International Competition
Language:English

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Harald Oberhofer

Function: Senior Economist, Managing Editor Empirica
Research groups: Industrial Economics, Innovation and International Competition