Macroeconomic assessment of possible Green Recovery scenarios in Visegrad countries

Abstract

The article discusses how and why Green Recovery could be beneficial for the Visegrad countries based on a modelling exercise using the E3ME macroeconometric model. Green Recovery is defined as including policies in recovery plans that not only target economic recovery, but also contribute to environmental targets. The paper proposes that a Green Recovery could be valuable and suitable for the region contributing to both restoring employment and boosting economic activity as well as reaching climate goals. This is tested through a macroeconomic simulation, using the E3ME model. E3ME is built on Post-Keynesian economic theory and on econometric estimations of macroeconomic relationships. The results of the analysis focus on three dimensions: (1) social – employment, (2) environmental – level of CO2 emissions and (3) economic activity – gross domestic product (GDP). Outcomes indicate that a green recovery can shorten the time needed for employment and economic recovery as well as contributes to CO2 emission reductions. In Hungary, Czechia and Poland, the impact persists into the long-term; however, the paper also concludes that countries with high reliance on coal (e.g. Poland) could return to coal in the long term if no further policies are introduced.

The potential of the Visegrad Cooperation (V4) for the safe restarting of tourism in the region following the COVID-19 epidemic

“…The epidemic affected the societies of Central and Eastern Europe as well, with 3074 deaths in Hungary (1), 2846 in the Czech Republic (2), 2300 in Slovakia (4) and 1983 in Poland (9) caused by COVID-19 infection, per million inhabitants (the numbers in parentheses indicate the given country's rank in the list of the 31 countries of the combined EEA-UK rankings of COVID-19-related deaths). 1 The Visegrad Group (V4), an integration established in 1991 to promote cooperation, and economic and social catching-up in the region, pays special attention to the cooperative treatment of the socio-economic consequences of the COVID-19 epidemic, especially to the creation of conditions for safe tourist flow (Antošová-Vogl-Schraud 2020, Kiss-Dobronyi-Fazekas-Pollitt 2021.…”

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“…The key barriers to implementing green initiatives are the need for adequate financial resources and the fact that environmental protection is not a priority for the government.In the V4 countries, one of the critical factors affecting the sustainable development of enterprises is the fact that these countries use European Union funds more effectively and implement green technologies and programs supporting green activities. Economic development is still necessary because it determines investments and eco-logical development(Wach et al, 2021;Uğurlu, 2022;Gostkowski et al, 2021).Maintaining macroeconomic, social and environmental stability in the last decade is crucial for developing green initiatives(Su et al, 2018;Kiss-Dobronyi et al, 2021). Therefore, it should be emphasized that this relationship should be positive.Further development of the energy sector in Czechia, Hungary, Poland, and Slovakia should follow the idea of sustainable development, although it will be required large financial outlays in implementing new technologies and removing damage al-ready formed in nature.…”