Journal Article
Investment Behaviour, Population Structure and Long-term Growth in Eastern Europe and Russia

It is now amply documented that in most of the former socialist countries of Europe, the transition to the market economy entailed short term growth and welfare losses (UNICEF 1994, Cornia 1996, Milanovic 1998). Much less is known about the long-term impact of the transition to the market economy. In this paper we attempt to fill, if only in part. this gap. We are interested in particular to examine the long-term impact on growth and welfare of recent changes in: (i) saving ratios and the accumulation of physical capital; (ii) the stock of human capital; (iii) and demographic variables. After discussing recent changes in each of these areas. we combine this information in the simple simulation model to assess the long-term impact of changes in these areas.