ECONOMIC GROWTH IN THE CENTRAL CAUCASO-ASIAN COUNTRIES ADJUSTED FOR THE CATCH-UP EFFECT
Vladimer Papava, D.Sc. (Econ.), Professor, Senior Fellow of the Georgian Foundation for Strategic and International Studies (Tbilisi, Georgia)
One of the main problems of economic development is to ensure stable economic growth. This article examines some issues relating to the measurement of economic growth in the context of Central Caucaso-Asia, a geopolitical region which includes the countries of the Central Caucasus (Azerbaijan, Armenia and Georgia) and Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan).
It should be emphasized that this problem has been analyzed in a number of significant publications. In order to measure economic growth, it is particularly important to use a more or less adequate method allowing a spatial comparison of countries and regions. But at present such a comparison is complicated by the existence of the so-called “catch-up effect.”
The approach proposed below makes it possible to remove this effect and make a more adequate comparison of economic growth in countries and regions (with a case study of the Central Caucaso-Asian countries).
On the Catch-Up Effect
As we know, economic growth is measured using two indicators: gross domestic product (GDP) growth rate (R), and rate of increase of GDP (r). The first indicator is calculated by dividing real GDP in the……..