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Growth in Transition: What we Know, What we Don't and What we Should

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Campos, Nauro F
Coricelli, Fabrizio

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Abstract

This essay surveys macroeconomic issues that marked the transition from centrally planned to market economy in Central and Eastern European and former Soviet Union countries. We first establish a set of stylized facts of the transition so far, namely: (1) output fell, (2) capital shrank, (3) labour moved, (4) trade reoriented, (5) the structure changed, (6) institutions collapsed, and (7) the transition costs. We then critically survey the theoretical literature on transition, discussing various explanations for the initial output fall as well as medium term issues, such as optimal speed of transition, disorganization, institutions and sectoral reallocation as a source of output dynamics. Last, we review the empirical literature to assess how well it translates the theoretical models and explains the stylized facts. The essay concludes with a succinct list of suggestions for future research.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3246.

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Date of creation: Mar 2002
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Handle: RePEc:cpr:ceprdp:3246

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Keywords: central and eastern europe former soviet Union growth stylized facts transition

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Find related papers by JEL classification:
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
P24 - Economic Systems - - Socialist Systems and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General

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