MACROECONOMIC STATISTICS

MACROECONOMIC STATISTICS

MACROECONOMIC STATISTICS

Sponsored by a Grant TÁMOP-4.1.2-08/2/A/KMR-2009-0041 Course Material Developed by Department of Economics,

Faculty of Social Sciences, Eötvös Loránd University Budapest (ELTE) Department of Economics, Eötvös Loránd University Budapest

Institute of Economics, Hungarian Academy of Sciences Balassi Kiadó, Budapest

MACROECONOMIC STATISTICS

Author: Gábor Oblath

Supervised by Gábor Oblath January 2011

ELTE Faculty of Social Sciences, Department of Economics

MACROECONOMIC STATISTICS

Week 10

International competitiveness Part II

Case study: Hungary’s relative competitiveness in the 2000s

Gábor Oblath

Outline

• Interpretation of international competitiveness (return to some previous questions)

• Questions regarding HU’s competitiveness in the 2000s

• Foreign market share, import penetration

performance on EU-markets and the results of the CMS-analysis

• Price and volume indices and UV-levels

• Concluding remarks

• Statistical sources : Eurostat, AMECO, UN

National Accounts Database

Approach

• Analysis based on

– Foreign trade statistics and national accounts, rather than micro-data

• Descriptive

– What happened?

– Tentative answers to: ”why?”

• (has to be supported by analysis from the micro- side)

– No policy recommendations regarding ways to improve competitiveness

– As a first step, actual developments have to be described.

Two quotations

”Economists, in general, do not use the word

‘competitiveness’. Not one of the textbooks in

international economics I have on my shelves contains the word in its index.”

(P. Krugman: Making Sense of the Competitiveness Debate – 1996)

”Exchange rates had to be adjusted to assure competitiveness. Only then could the virtues of markets come into play.”

(P. Krugman: Paul Samuelson: The incomparable economist – 2009)

• Message

• The main problem with ”competitiveness”: it means too many things

• Once defined, is may be a useful concept

The problem with the concept of competitiveness

• Propositions regarding international

competitiveness are mixed up with propositions regarding overall performance of economies

• Competitiveness is mixed with issues regarding

– Level of taxation

– Expenditures on R+R – etc.

• Before using the term ”competitiveness” is used, it has to be defined

• But first

– A dead end – A wrong path

Dead end: competitiveness (of nations) is an empty concept

• Krugman (I): ”obsession”

• ”At most productivity” (Porter etc.)

• Counter argument: Krugman (II)

”It’s OK to talk about competitiveness when you’re specifically asking whether a country’s exports and import-competing industries have low enough costs to sell stuff in competition with rivals in other countries;

measures of relative costs and prices are, in fact, commonly – and unobjectionably – referred to as competitiveness indicators.”

http://krugman.blogs.nytimes.com/

• The point is :

– Some countries gain, some others loose share in international markets

 the question/concept is relevant.

– If the concept is termed empty by economists, it will be filled by ”stuff”

by others.

A wrong path: competitiveness ”overall macro-performance”

• See e.g. World Economic Forum Global Competitiveness Report:

”We define competitiveness as the set of – institutions,

– policies, and

– factors that determine the level of productivity of a country.

The level of productivity, in turn, sets

– the sustainable level of prosperity that can be earned by an economy.

– In other words, more-competitive economies tend to be able to produce higher levels of income for their citizens.”

• In this approach competitiveness is mixed up with the concept of potential/sustainable growth of economies.

A suggested definition

• Competitiveness means the revealed*

international performance of countries

– Mainly: export performance

– In addition: performance of domestic industries at the home market

• It may also mean factors contributing to international performance

– RER-indices (price/cost competitiveness);

– Other (non price/cost factors of competitiveness (magnitude: empirical question)

Implications 

*Analogy: ”revealed comparative advantage” (Balassa, 1963)

Implications of the suggested definition

International competitiveness should not be identified with

• the overall relative performance of the economy:

– Growth of GDP – Productivity

– ”Well being”

• External imbalances

Why is the distinction between overall and external performance important?

• E.g. Hungary

– 1996–2000: rapid growth, moderate improvement in

”well being”, strong improvement in external performance

– 2001–2005: rapid growth, sizable improvement in

”well being”, but: unsustainable fiscal expansion – 2006–2008: fiscal correction (falling domestic

demand)  slow-down in economic growth

• 2001–2005: improving competitiveness?

• 2006–2008: deteriorating competitiveness?

• Overall performance and competitiveness have

to be distinguished

Further distinction: competitiveness has no direct relation with external balance

• External imbalances: mirror of internal imbalances, e.g.:

– CA= S–I;

– X-M = (GDP – domestic absorption)

• Competitiveness:

– external (internal?) market share

• BUT: the two may have common parts, e.g.:

• Illustration

Real and price level convergence (EU-15=100, left axis) and net exports/GDP (%, right axis)

20 30 40 50 60 70 80

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

CZ GDP/cap CZ_PPP/E CZ_NX

40 45 50 55 60 65

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 -10%

-8%

-6%

-4%

-2%

0%

2%

4%

HU_GDP/cap HU_PPP/E HU_NX/GDP

30 35 40 45 50 55 60

1991 1992

1993 1994

1995 1996

1997 1998

1999 2000

2001 2002

2003 2004

2005 2006

2007 -7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

PL GDP/cap PL_PPP/E PL_NX

30 35 40 45 50 55 60 65

1991 1992

1993 1994

1995 1996

1997 1998

1999 2000

2001 2002

2003 2004

2005 2006

2007 -12%

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

SK_GDP/cap SK_PPP/E SK_NX/GDP

Relative GDP and export performance at constant prices

60 70 80 90 100 110 120 130 140 150 160

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CZ HU PL SK

60 70 80 90 100 110 120 130 140 150 160

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CZ HU PL SK

GDP Exports of goods and services

Gross domestic product at 2000 market prices : performance relative to 35 industrial countries

Exports of goods and services at 2000 market prices : performance relative to 35 industrial countries

Relative GDP (”overall”) and export performance at constant prices (3 periods)

GDP

Gross domestic product at 2000 market prices : performance relative to 35 industrial countries

Exports of goods and services at 2000 market prices : performance relative to 35 industrial countries

HU: After 2003-2004 relative overall performance deteriorated, but relative X-performance improved

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

CZ HU PL SI SK

97-2000 2001-2004 2005-2008

-2%

0%

2%

4%

6%

8%

10%

CZ HU PL SI SK

97-2000 2001-2004 2005-2008

Exports of goods and services

The relation between revealed competitiveness and RER

• In principle (and – mostly – in practice) the appreciation of RER results in a loss of

competitiveness ( fall in external market share)

• Occasionally the case is the opposite 

”Kaldor-paradox” (1978):

– 1960–70s: Kaldor emphasized the role of

„qualitative competitiveness”

– In EU-NMS (until 2008) ”catching up” RER- appreciation (BS-effect and others)

– Developments in the EU-27?

Four indicators of real appreciation and relative export performance, EU27 constant prices 1996–2000 (annual average %-change)

ULC total economy

Export- deflator

ULC manu- facuring

GDP- deflator

BE BU

CZ DK

DE

EE IE

EL ES FR

IT CY

LV

LT HU

MT AT NL

PL

PT

RO SI

SK FI

SE

UK

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

-6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14%

XperfQ_95_00

RER_ulc_E

BE BU

CZ DK

DE

EE IE

EL ES FR

IT CY

LV

LT HU

MT AT NL

PL

PT

RO SI

SK FI

SE

UK

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

-8% -6% -4% -2% 0% 2% 4% 6% 8% 10%

XperfQ_95_00

ERE_ulcM

BE

BU CZ DK

DE

EE IE

EL ES FR

IT CY

LV

LT HU

MT ATNL

PL

PT RO SI

SK FI

SE

UK

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

-6% -4% -2% 0% 2% 4% 6% 8% 10%

XperfQ_95_00

RER_Px

BE

BU CZ DK

DE

EE IE

EL ES FR

IT CY

LV

LT HU

MT AT NL

PL

PT

RO SI

SK FI

SE

UK

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

-6% -4% -2% 0% 2% 4% 6% 8% 10% 12%

XperfQ_95_00

RER_gdpD

negative relationship

Four indicators of real appreciation and relative export performance, EU27 constant prices 2001-2008 (annual average %-change)

GDP- deflator

BE

BU

CZ

DK DE

IE EE

EL ES

FR IT CY

LV LT

HU

MT NL AT

PL

PT

RO

SI

SK

SE FI UK

-4%

-2%

0%

2%

4%

6%

8%

10%

-2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8%

XperfQ_01_08

RER_ulc_E

BE

BU

CZ

DK DE

IE EE

EL

ES

FR

IT CY

LV LT

HU

MT NL

AT PL

PT

RO

SI SK

SE FI UK

-4%

-2%

0%

2%

4%

6%

8%

10%

-2% -1% 0% 1% 2% 3% 4% 5% 6%

XperfQ_01_08

RER_ulc_M

BE

BU CZ

DK DE

IE EE

EL ES

FR

IT CY

LV LT HU

MT NL AT

PL

PT

RO

SI

SK

SE FI

UK

-4%

-2%

0%

2%

4%

6%

8%

10%

-2% -1% 0% 1% 2% 3% 4% 5%

XperfQ_01_08

RER_Px

BE

BU CZ

DK DE

IE EE

EL ES

FR IT

CY LV

LT

HU

MT NL AT

PL

PT

RO

SI

SK

SE FI

UK

-4%

-2%

0%

2%

4%

6%

8%

10%

-2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9%

XperfQ_01_08

RER_gdpD

ULC total economy

Export- deflator

ULC manu- facuring

Regarding 3 indicators, positive relationship

For the 2000s: the ”paradox” is due to EU-NMS [CEE]

• For old EU-countries no paradox (CEE-dummy removes the positive relationship) 

• BUT: CEE-effect is different from original Kaldor paradox – a mix of:

– Catching up (BS-) effect,

– Correction of initial undervaluation,

– Some ”qualitative competitiveness” (structural change)

Relative export performance and REER indices in the EU27

Effect of alternative REER-indices

without CEE-dummy With CEE dummy

X_ performance Adj R² X_ performance CEE Adj R²

1996-2000

ULC_E -0,10 0,02 -0,02 0,03** 0,40

(-1,10) (-0,10) (2,65)

ULC_M -0,29** 0,08 -0,41** 0,02 0,12

(-2,09) (-2,14) (1,25)

X_deflator -0,45 0,04 -0,94 0,02 0,05

(-1,10) (-1,56) (1,29)

GDP_deflator -0,05 0,00 -0,22 0,02 0,00

(-0,50) (-1,05) (0,82)

2001-2008

ULC_E 0,67*** 0,24 -0,13 0,05*** 0,66

(3,25) (-0,62) (6,53)

ULC_M 0,90 0,00 -0,28** 0,05*** 0,70

(0,12) (-2,07) (7,49)***

X_deflator 0,67** 0,08 -0,54** 0,06*** 0,70

(2,06) (-2,25) (8,05)

GDP_deflator 0,90*** 0,38 0,13 0,04*** 0,66

(5,23) (0,50) (5,30)

X-perf = a + b(RER-index) +ε

X-perf= a +b(RER-index) +c(CEE-dummy) + ε

*** Significant at 1%; ** significant at 5%

(In the 2000s the sign of the RER changes when controlled for CEE)

Hungary’s external performance in the 2000s as compared to the 1990s and V3

• External and internal market share

• Export growth

– Volume, prices, terms of trade (T/T)

– The value-index of exports – a competitiveness indicator?

• Regional structure of exports

• Regional developments in prices and T/T

Two interpretations

• HU’s competitiveness worsened, e.g.

– Export prices

– Regional reorientation – (…)

• HU’s competitiveness did not deteriorate, e.g.

– Increased market shares in real terms

– Decreased dependence on EU15 markets – (...)

• Impossible to decide: indications of both

• Difficult to explain: difference between

developments at constant vs. current prices

Relative export performance at constant (x axis ) and current prices (y axis) 1996–2000 and 2001–2008

UK

SE FI

SK

SI RO

PT

PL

ATNL MT

HU

LT LV

CY IT

FR ES

EL EE IE

DE DK

CZ BU

BE

y = 0,8359x + 0,0095 R² = 0,4661

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

-6% -4% -2% 0% 2% 4% 6% 8% 10% 12%

XperfV_95_00

XperfQ

UK

SEFI

SK

SI

RO

PT

PL

NL AT MT

HU LT

LV

IT CY FR

ES EL

IE EE

DE DK

BU CZ

BE

y = 1,169x + 0,0146 R² = 0,8192

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

-4% -2% 0% 2% 4% 6% 8% 10%

XperfV_01_08

XperfQ

HU: outstanding performance at both current and constant prices

Sound at constant prices relatively poor at current prices

Topics to be covered

• Market shares

• ” Qualitative competitiveness”

• CMS-analysis

• Price and volume indices

Shares in world imports and aggregate demand

• World imports

– current

– constant prices

• ”Import-penetration” [dM/(d(BF+X)]

– Relevant at constant prices

• Net effect

Source: UN National Accounts database

External market share at current and constant prices:

1995–2007 (%-change)

-2%

0%

2%

4%

6%

8%

10%

12%

14%

CZ HU PL SK

96-2000 2001-2004 2005-2007

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

CZ HU PL SK

96-2000 2001-2004 2005-2007

Current price Constant price

”Import penetration” (import/total demand) at current and constant prices: 1995–2007 (%-change)

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

CZ HU PL SK

96-2000 2001-2004 2005-2007

0%

1%

2%

3%

4%

5%

6%

7%

8%

CZ HU PL SK

96-2000 2001-2004 2005-2007

Current price Constant price

The ”net effect” at current and constant prices: 1995–2007 (%-change)

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

CZ HU PL SK

96-2000 2001-2004 2005-2007

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

CZ HU PL SK

96-2000 2001-2004 2005-2007

The net effect: (Xi/Mi)*[(DAi+Xi)/Mw]

HU: the indicator is difficult to interpret at current price, but the one at constant price makes sense

Qualitative/institutional competitiveness

• ”Revealed:”  residuals of cross-section export equations

• Results of international surveys

Residuals of equations explaining relative export performance

• X-performance-index = a +b(RER-index) +c(CEEU- dummy) + ε

• Period: 2000-08 and 2005-08, for EU-26

• Only equations with REER_Px and és a REER_ULCm (+ CEEU-dummy) are significant

• Residuals may be indications of non-price (qualitative) competitiveness

• Next chart: V-5 countries

Residuals of export-equations:

2000–2008 and 2005–2008

Change in market share (const. price) Relative export perform. (const. price)

-2,0%

-1,5%

-1,0%

-0,5%

0,0%

0,5%

1,0%

1,5%

2,0%

CZ HU PL SI SK

Xperf_RERpx_01_08 Xperf_RERpx_05_08 Xperf_RERulcm_01_08 Xperf_RERulcm_05_08

Percentage points change in relative performance, unexplained by price/cost competitiveness

-2,0%

-1,5%

-1,0%

-0,5%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

CZ HU PL SI SK

dMS_RERpx_01_08 dMS_RERpx_05_08 dMS_RERulcm_01_08 dMS_RERulcm_05_08

Px

ULCm

The popular approach:

(example) WEF-GCR: rankings

Foreign market shares

excluding and including intra-EU trade – goods

Intra-EU-val

0,0 0,2 0,4 0,6 0,8 1,0 1,2

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CZ

HU PL SK Intra-EU nélkül

0,00 0,05 0,10 0,15 0,20 0,25 0,30 0,35

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CZ

HU PL SK

Regional composition of exports (the share of intra and extra EU-trade in % of total trade of countries)

50%

55%

60%

65%

70%

75%

80%

2000 2001 2002 2003 2004 2005 2006 2007 2008

CZ EU15_INTRA HU EU15_INTRA PL EU15_INTRA SK EU15_INTRA

0%

5%

10%

15%

20%

25%

30%

35%

2000 2001 2002 2003 2004 2005 2006 2007 2008

CZ EU10 intra HU EU10 intra PL EU10 intra SK EU10 intra

0%

5%

10%

15%

20%

25%

30%

2000 2001 2002 2003 2004 2005 2006 2007 2008

CZ EU25_EXTRA HU EU25_EXTRA PL EU25_EXTRA SK EU25_EXTRA

Interpretation: 

Ratio of actual trade to potential with the euro area

BUSSIERE, M.–FIDRMUC, J.–SCHNATZ, B. (2005): Trade Integration of Central and Eastern European Countries Lessons from a Gravity Model. European Central Bank Working Paper Series, No. 545. figure 8, p. 28

Shares in EU-25 exports: goods, services and total at current prices (EUR): 1995-2008 (in %)

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CZ_Xgs

HU_Xgs SK_Xgs PL_Xgs

Áru és szolgáltatás

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

3,5%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CZ_Xg

H_Xg SK_Xg PL_Xg

Áru

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CZ_Xs

HU_Xs SK_Xs PL_Xs Szolgáltatás

Total

Goods Services

Shares in EU-25 exports: goods, services and total at prices of 2000

1995–2008 (in % – left pane), and the difference between shares at current and constant prices (in %-points – right pane)

0,2%

0,4%

0,6%

0,8%

1,0%

1,2%

1,4%

1,6%

1,8%

2,0%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CZ_Xgs(vol)

HU_Xgs(vol) PL_Xgs(vol) SK_Xgs(vol) Áru és szolgáltatás (2000. évi áron)

-0,2%

0,0%

0,2%

0,4%

0,6%

0,8%

1,0%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 CZ_Xgs

HU_Xgs PL_Xgs SK_Xgs

Folyó és változatlan ár eltérése

The major question Similar performance

CMS: constant market share analysis

Market-growth Structural effect Competitiveness

Idea: decomposition of export-growth into three main components:

Decomposition

(in %)

Decomposition

contributions in intra-EU imports and extra-EU exports (in %)

1999–2003 2003–2008

Maket growth Structural Competitiveness Maket growth Structural Competitiveness

effect effect

Components of CZ 34,9 –1,6 66,8 39,2 –2,7 63,5

X-increment PL 29,4 0,4 70,2 39,7 0,7 59,5

vs. intra-EU HU 41 –4,1 63,1 56,9 –15,7 58,8

imports SK 27 0,3 72,7 26,7 –0,2 73,5

Total V4 33,3 –1,2 67,9 39,9 –3,3 63,3

Components of CZ 36,4 –1,3 64,8 27,5 –1,5 74

X-increment PL 32,6 –0,7 68,1 24,8 –0,7 75,8

relative to extra-EU HU 38,4 –1,7 63,3 27 0,1 72,9

exports SK 16,7 –1,5 84,8 29 –1,2 72,2

Total V4 32,4 –1,2 68,8 26,5 –0,7 74,2

Price and volume changes

• EA-12

• Non EA-EU (NMS+)

• Extra EU-25

Price and volume indices in 3 relations: exports (2000–2007; 2000=100)

2007

2006

2005

2004

2003 2002

2001 100

150 200 250 300 350 400

85 90 95 100 105 110 115 120 125 130

CZ_Xvol_extra_eu25 HU_Xvol_extra_eu25 PL_Xvol_extra_eu25 SK_Xvol_extra_eu25 Volumen

Egységérték

2007

2006

2005 2004

2003 2002 2001 2007

2006 2005 2004 20022003

2001 100

120 140 160 180 200 220 240 260

90 95 100 105 110 115 120 125 130

CZ_xvol_ea12 HU_Xvol_ea12 PL_Xvol_ea12 SK_Xvol_ea12

Egységérték Volumen

2007

2006

2005

2004

2003 2002

2001 100

150 200 250 300 350 400 450

90 95 100 105 110 115 120 125 130

CZ_Xvol_eu_not_ea HU_Xvol_eu_not_ea PL_Xvol_eu_not_ea SK_Xvol_eu_not_ea Volumen

Egységérték

Price and volume indices in 3 relations : imports (2000-2007; 2000=100)

2007

2006

2004 2005 2003

2002

2001 100

120 140 160 180 200 220

85 95 105 115 125 135

CZ_Mvol_extra_eu25 HU_Mvol_extra_eu25 PL_Mvol_extra_eu25 SK_Mvol_extra_eu25 Volumen

Egységérték

2007 2006 2005 2004 20022003 2001 100

120 140 160 180 200 220 240 260

95 100 105 110 115 120 125 130

CZ_Mvol_ea12 HU_Mvol_ea12 PL_Mvol_ea12 SK_Mvol_ea12 Volumen

Egységérték

2007 2006

2005 2004 2003

2002 100 2001

120 140 160 180 200 220 240 260 280 300 320

95 100 105 110 115 120 125 130 135 140

CZ_Mvol_eu_not_ea HU_Mvol_eu_not_ea PL_Mvol_eu_not_ea SK_Mvol_eu_not_ea Volumen

Egységérték

Terms of trade and indices of volume ratios:

exports/imports (2000–2007)

2001 2002 2003

2004 2006 2007

2001 2002

2004 2005 2007

20012002 2003 2004 2005

2006 2007

2001 2002

2003 2004

2005 20062007

70 90 110 130 150 170 190 210

80 85 90 95 100 105 110 115 120

CZ_VR_extra_eu25 HU_VR_extra_eu25 PL_VR_extra_eu25 SK_VR_extra_eu25

Cserearány

X_vol/M_vol ²⁰⁰¹

2002 2003

2004 2005 20062007 2001

2002 2003

2004 2006

2007

2001 2003

20042005 2007

2001 2002 2003

2004

2005 2006 2007

80 85 90 95 100 105 110 115 120

90 95 100 105 110

CZ_VR_ea12 HU_VR_ea12 PL_VR_ea12 SK_VR_ea12

Cserearány X_vol/M_vol

2001 2002 2003

2004 2006 2005

2007

2001 2002 2003 2004 2005 2006 2007

2001 2002 2003

2004 2005

2006 2007

2002 2001 2003 2004 2006 2007

80 90 100 110 120 130 140 150 160 170

80 85 90 95 100 105 110

CZ_VR_eu_not_ea HU_VR_eu_not_ea PL_VR_eu_not_ea SK_VR_eu_not_ea

Cserearány X_vol/M_vol

Total FDI stock relative to total GVA (left pane) and manufacturing FDI stock relative to manufacturing FDI (right pane) between 1998 and 2008

10%

20%

30%

40%

50%

60%

70%

80%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Csehország Magyarország Lengyelország Szlovákia

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

120%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Csehország

Magyarország Lengyelország Szlovákia

Structural changes – due to FDI inflows – characterising the V3 countries in the 2000s began earlier in HU

However, this is very far from the full explanation for the differential performance of the V4 countries in the 2000s

Ideas regarding further explanations?

A possible explanation for HU’s relative performance

in the 2000s: the timing of FDI-inflows