Growth and Employment in Europe: Sustainability and Competitiveness, Department of Economics, WU (Wirtschaftsuniversität Wien)
The Austrian Miracle - Revisited: Testing eight Explanations for High Growth and maybe a ninth
Abstract: This paper is a first attempt to empirically evaluate some
competing hypotheses for the Austrian growth performance. We find that the
real appreciations, gross investment, a low duration of unemployment and
high youth employment exhibit a significant influence on economic growth.
This validates the hard currency policy hypothesis, the macroeconomic
management hypothesis, and the microinstitutions hypothesis, whilst all
other fail according to this exercise. In particular, we find the
Schulmeister-thesis of loose money and the deficit spending hypothesis are
even counterfactual. Summarizing, we find that economic policy had its
share in promoting growth in the Austrian economy. As a byproduct from our
analysis, we find that low levels of unemployment have a significant and
positive impact on the growth rate of real GDP, which calls for further
theoretical research in this direction.
Keywords: Economic Growth; Growth Determinants; Extreme Bounds Test; CDF-Test; Austria; (follow links to similar papers)
JEL-Codes: O47; O53; (follow links to similar papers)
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