Factors of Economic Growth and Catch-Up in Greece (196002010)

Abstract

The paper investigates the factors of economic growth in Greece and the results of the Greek economy’s catch-up with the European Union and the United States. On the basis of an endogenous growth model (the general, or world model), the author points out the main regularities of macro- and micro-level economic growth in Greece over the past half century (1960–2010), within which he identifies as turning points the country’s accession to the EU (1981) and the Euro Area (2001). Then he analyzes with the help of the general model the changes in the catch-up factors of Greek economy, revealing the fundamental causes of lagging behind the EU average. According to the empirical results, complete economic catch-up with the EU-15 still requires time, even if it continues at the most favourable foregoing rate. A faster catching-up may be ensured, along with the attraction of external resources, primarily by a more effective economic policy. The main conclusion is that it is possible to accelerate the catch-up process by increasingly investing in human capital, namely education and R&D.