OBSOLESCENCE OF PHYSICAL CAPITAL IN THE COURSE OF TRANSITION

This study explores the main factor of one country's economic growth is physical capital and its changes in the course of transition. It provides a broad portray of one specific issue is obsolescence of physical capital that have been recorded in the course transition, but have been marginalized in growth studies for transition economies. Hence, this paper brings forward the discussion on obsolescence that should be considered as highly relevant for economies in transition. Not only it affected the actual processes of restructuring and reallocation in transition countries, but it also affects contemporary economic growth measured by the GDP per capita movements of the countries, especially lagging transition countries.