Analiza Constrângerilor
Analysis of Constraints

Author(s): Alex Oprunenco, Ana Popa
Subject(s): National Economy, Socio-Economic Research
Published by: EXPERT-GRUP Centrul Analitic Independent
Keywords: Economic Growth; Growth Diagnostics;
Summary/Abstract: This report is an update of the "Analysis of Constraints to Economic Growth" study carried out for the Republic of Moldova in 2007 at the initiative of the Millennium Challenge Corporation. The purpose of the report is to identify the critical constraints for the economic growth of the Republic of Moldova, using the methodology developed by Hausmann, Rodrik and Velasco in their work "Growth Diagnostics" ("Growth Diagnostics") published in 2005. The methodology proposed by these researchers is based on the hypothesis that the rate of economic growth (equal to the rate of capital accumulation) is a function of the difference between the expected rate of capital accumulation and the effective cost of this capital. Starting from this premise, the economic constraints are grouped into three large groups that determine the low level of private investments and entrepreneurial activities: (1) those that determine low social profitability (natural and human capital, infrastructure, and innovations and competitiveness); (2) those that determine the low rate of profitability appropriation (investment climate and macroeconomic risks); (3) those that determine the high cost of capital (access to financial resources).

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