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Convergence and Divergence in Europe: Polish and Ukrainian Cases Munich Personal RePEc Archive Convergence and Divergence in Europe: Polish and Ukrainian Cases Lukianenko, Dmytro and Chuzhykov, Viktor and Woźniak, Michał Gabriel and Antoniuk, Larysa and Bal-Woźniak, Teresa and Bolonek, Ryszarda and Dobija, Mieczysław and Fedirko, Natalia and Fedirko, Oleksandr and Firszt, Dariusz and Honcharuk, Andrii and Ilnytskyi, Denys and Jabłoński, Łukasz and Kaleniuk, Iryna and Kaliszuk, Ewa and Kleer, Jerzy and Olefir, Anna and Panchenko, Yevhen and Poruchnyk, Anatolii and Satsyk, Volodymyr and Savchuk, Volodymyr and Stępień, Kinga and Stolyarchuk, Yaroslava and Tatarenko, Nataliya and Tokarski, Tomasz and Tsyhankova, Tetiana Kyiv National Economic University named after Vadym Hetman, Ukraine, Krakow Economic University, Poland 29 April 2013 Online at https://mpra.ub.uni-muenchen.de/54747/ MPRA Paper No. 54747, posted 27 Mar 2014 14:59 UTC MINISTRY OF EDUCATION AND SCIENCE OF UKRAINE State higher educational establishment KYIV NATIONAL ECONOMIC UNIVERSITY named after VADYM HETMAN Convergence and Divergence in Europe: Polish and Ukrainian Cases Monograph Scientific editors Dmytro LUKIANENKO Viktor CHUZHYKOV Michał Gabriel WOŹNIAK 2013 УДК 339.92 ББК 33М Con 63 Reviewers Anton Filipenko, Doctor of Economic Sciences, Prof. (Institute of International Relations of Taras Shevchenko National University of Kyiv) Viktoria Dergachova, Doctor of Economic Sciences, Prof. (International Economics Department of National Technical University of Ukraine «Kyiv Polytechnic Institute») Recommended for publication by the Academic Council of KNEU Minutes No. 8 dated 05 June 2012 English text proof-reading Oleksandr Fedirko, Kateryna Nikoniuk, Oksana Vinska The all-round aspects of bilateral relations are considered in the common Ukrainian-Polish monograph. Authors uncover important features of social-and- economic systems convergence under conditions of globalization and European integration, as well as the further transformation of Central- and East European countries. The focus of the monograph is to analyze the characteristic features of the evolution of Polish and Ukrainian economic models. The research interest of the authors of the book has been concentrated on the diversification of bilateral economic relations and subject to the fundamental ob- jective – the co-integration of Ukraine and the EU, as well as the possibility of adapting the Polish experience of systemic transformation of the national social and economic model. The book is addressed to scientists, politicians, public activists, diplomats, in- ternational experts, and to all those, who are not indifferent to the European pros- pect of Ukraine. Distribution and reproduction without the official permission of KNEU is prohibited © D. Lukianenko, V. Chuzhykov, M. G. Woźniak and others, 2013 ІSBN 978-966-483-711-8 © KNEU, 2013 AUTHORS Lukianenko Dmytro (ed.) — preface (co-author); 1.5 (co-author); 3.1; 5 (co-author) Chuzhykov Viktor (ed.) — preface (co-author); 1.1; 1.5 (co-author); 3.2 (co-author); 5 (co-author) Woźniak Michał Gabriel (ed.) — preface (co-author); 1.2; 1.4; 1.7; 1.8; 2.1; 2.2; 2.3; 2.4; 2.5; 4.7 Antoniuk Larysa — 3.3 (co-author) Bal-Woźniak Teresa — 4.8 Bolonek Ryszarda — 2.6 (co-author) Dobija Mieczysław — 1.6 Fedirko Natalia — 3.2 (co-author) Fedirko Oleksandr — 3.2 (co-author) Firszt Dariusz — 2.6 (co-author) Honcharuk Andrii — 4.5 (co-author) Ilnytskyi Denys — 4.9 Jabłoński Łukasz — 1.3 Kaleniuk Iryna — 4.10 Kaliszuk Ewa — 4.4 Kleer Jerzy — 4.1 Olefir Anna — 3.4 (co-author) Panchenko Yevhen — 3.2 (co-author) Poruchnyk Anatolii — 4.2 (co-author); 5 (co-author) Satsyk Volodymyr — 3.3 (co-author) Savchuk Volodymyr — 4.3 Stępień Kinga — 4.6 Stolyarchuk Yaroslava — 4.2 (co-author) Tatarenko Nataliya — 3.5 Tokarski Tomasz — 4.11 Tsyhankova Tetiana — 3.4 (co-author); 4.5 (co-author) Contents Opening remarks by the Rector of the State higher education establishment «Kyiv National Economic University named after Vadym Hetman»........................................13 Opening remarks by the Rector of the Cracow University of Economics............................................ 14 Preface to the English language edition of the monograph «Convergence and Divergence in Europe: Polish and Ukrainian Cases»............................................... 15 Chapter 1 THEORETICAL AND EMPIRICAL BASES OF CONVERGENCE OF COUNTRY MODELS UNDER CONDITIONS OF GLOBALIZATION OF THE WORLD ECONOMY .......................................... 18 1.1. The Essence and Fundamental Features of the Evolution of Country Models (late 20th — early 21st centuries) ............. 18 1.1.1. Introduction................................. 18 1.1.2. The Paradigmatic Vacuum of Country Models........ 19 1.1.3. Transformational Models of Central and Eastern European Countries (CEE)........................... 27 1.1.4. Can Country Models Converge?...................30 1.2. Criteria for the Evaluation of the Functionality of Economic Systems .............................................. 32 1.2.1. Introduction................................. 32 1.2.2. Economic Growth Criterion...................... 33 1.2.3. The Balance Criterion.......................... 36 1.2.4. Stabilization Criterion.......................... 38 1.2.5. Economic Efficiency Criterion.................... 41 1.2.6. Social Equality Criterion........................ 45 1.3. Theoretical Issues of Economic Convergence.............. 50 1.3.1. Introduction................................. 50 1.3.2. Interpretation of Convergence.................... 51 1.3.3. Dilemmas of Measuring the Similarity Process........ 54 1.3.4. Factors and Obstacles to Reducing the Difference in the Development of Countries in Economic Theory............ 56 6 Convergence and Divergence in Europe: Polish and Ukrainian Cases 1.3.5. Overview of Policies Aimed at Reducing the Difference in the Development of Countries....................... 61 1.3.6. Conclusions Regarding Post-Socialist Countries....... 66 1.4. Legal Aspects of Convergence within the Acquis Сommunautaire and Lisbon Strategy....................... 68 1.4.1. Origin and instruments of acquis communautaire...... 68 1.4.2. Organization Principles......................... 71 1.4.3. Structural socio-economic principles............... 75 1.4.4. Freedom of Movement of Capital.................. 78 1.4.5. Freedom of Movement of Individuals............... 78 1.4.6. Community Law in the Area of Competition ......... 81 1.4.7. The Lisbon Strategy as a Key Factor of Economic and Social Convergence................................ 83 1.5. The Convergence of National Economies under Conditions of EU Expansion ....................................... 90 1.5.1. Introduction................................. 90 1.5.2. Globalization.................................91 1.5.3. Regionalization............................... 96 1.5.4. Strategic Directions of the EU Policy............... 99 1.5.5. Socio-Cultural Determinants of Convergence........ 108 1.5.6. Conclusions for Ukraine....................... 111 1.6. An Analysis of the Similarity of Polish and Ukrainian Economies according to Changes in Labour Productivity ...... 114 1.6.1. Introduction................................ 114 1.6.2. Capital as a Synthetic Measure of Economic Growth . 115 1.6.3. Human Capital and Adequate Labor Costs.......... 119 1.6.4. The Nonparametric Function of Production and the Economic Growth Model........................... 125 1.6.5. Labour Productivity as an Equation: the Exchange of Money for Products............................... 128 1.6.6. Comparison of Labor Productivity and GDP per Capita during the Application of an Exchange Rate.............. 131 1.6.7. Improving the Theory of Exchange Rate............ 138 1.7. The Role of Social Capital in Economic Convergence ...... 141 1.7.1. Introduction................................ 141 1.7.2. The Problem of the Depreciation of Social Capital.... 148 1.7.3. Conclusions for the Transition Economics.......... 150 1.8. Paradoxes in the Development of Human Capital and Economic Convergence................................. 157 1.8.1. Introduction................................ 157 1.8.2. Findings of the Theory of Endogenous Growth....... 159 Contents 7 1.8.3. Problems of Measuring Human Capital............ 164 1.8.4. Paradoxes of the Quantitative and Structural Adaptation of Human Capital in a Post-Socialist Economy........... 165 1.8.5. Specific Paradoxes of Quality Adaptations of Human Capital in Post-Socialist Countries..................... 171 1.8.6. What are the Results of the European Human Capital Development Program?............................. 173 Chapter 2 THE EVOLUTION OF POLAND’S ECONOMIC MODEL .... 181 2.1. The Goal and Means for a Transformation of the Economic System.............................................. 181 2.1.1. Substance and Elements of the Transformation of an Economic System................................. 181 2.1.2. The Goals of an Economic System Transformation.... 183 2.1.3. Mistakes Made During the Transition to a Market economy........................................185 2.1.4. Shortcomings of a Gradual Transformation..........187 2.1.5. Reasons for Choosing the Shock Concept of Systematic change......................................... 188 2.1.6. Shortcomings of the Shock Approach.............. 191 2.2. Deregulation of Economic Activities.................... 193 2.2.1. Substance and Basis for Deregulation in Post-Socialist Countries....................................... 193 2.2.2. Deregulation of the Commodities Markets .......... 195 2.2.3.
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