The Macroeconomics of Transition

The unprecedented transition to market economies in Eastern Europe has raised questions about the efficacy of the economic theories and hypotheses put in practice there.The Macroeconomics of Transitionoffers a rational assessment of the successes and failures of those theories. The book focuses on the more economically advanced countries of Czechoslovakia, Hungary, Poland and the former Yugoslavia. The authors present a systematic account of macroeconomic developments and institutional changes in each country up to the summer of 1991 and the collapse of Yugoslavia. They assess progress and deal with the determinants of output, macro policies, wage, price and employment issues and the external balance. Each country report is preceded by a summary of common features of the transition and is followed by an analysis of theoretically based expectations of various aspects of the transition. By assessing the accuracy and usefulness of various economic theories in explainingand predicting the region's transition, the book offers lessons for the future and for changes in the less advanced countries of Eastern Europe.