The Impact of the Global Crisis on Transition Economies

Some events are rare, extreme, unpredictable until they actually happen but perfectly explainable afterwards. Taleb (2007) calls them “black swans” after those ugly birds that, unimaginable until they were discovered in Australia, have precisely these characteristics. The collapse of Soviet-type systems in 1989–91, associated with a deep and almost invariably prolonged depression, belongs to this class of events; its scant prediction was either mistaken in important respects or from purely “accidental prophecies” (Laqueur 1996). So does the global financial crisis of 2008–9, which might continue well into 2010 and beyond; in this there had been a number of accurate predictions (reviewed by Bezemer 2009) but they were rarely believed—otherwise they would have been falsified. The countries of Central and Eastern Europe were struck by the global crisis when their post-socialist transition had just been completed—for the ten new EU members of 2004 and 2007—or was still in process: a veritable double whammy in less than a generation.