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Supply Responses in the Economies of the Former Soviet Union

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  • Paul Hare
  • Alan Bevan
  • Jon Stern
  • Saul Estrin

Abstract

Output decline has been a feature of the transition economies in the initial post-communist period, including in those countries that belonged to the former Soviet Union. However, explanations for the decline and its persistence have not been easy to find, and mostly they have focussed upon domestic factors in each economy. The theory of disorganization introduced the idea that disrupted supply chains following the demise of central planning might have a role in the explanation of output decline. This paper extends that idea to distinguish between supply from domestic sources, and supply from abroad. Using data for Ukraine and Kazakhstan, the paper finds - contrary to expectation - that the disruption of supplies from hard currency markets was more significant in explaining output decline in these countries than disruption of supplies from CIS partners. This suggests that institutional weaknesses in the areas of international banking, trade insurance, and the like, have been very important factors.

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File URL: http://www.sml.hw.ac.uk/downloads/cert/wpa/2000/dp0009.pdf
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Bibliographic Info

Paper provided by Centre for Economic Reform and Transformation, Heriot Watt University in its series CERT Discussion Papers with number 0009.

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Date of creation: 2000
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Handle: RePEc:hwe:certdp:0009

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Keywords: trade; transition economies; CIS; disorganization; output decline.;

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References

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  1. J. M. C. Rollo & J. Stern, 1992. "Growth and Trade Prospects for Central and Eastern Europe," The World Economy, Wiley Blackwell, vol. 15(5), pages 645-668, 09.
  2. Olivier Blanchard & Michael Kremer, 1997. "Disorganization," William Davidson Institute Working Papers Series 38, William Davidson Institute at the University of Michigan.
  3. Rodrik, Dani, 1992. "Making Sense of the Soviet Trade Shock in Eastern Europe: A Framework and Some Estimates," CEPR Discussion Papers 705, C.E.P.R. Discussion Papers.
  4. Rodrik, Dani, 1992. "Foreign Trade in Eastern Europe's Transition: Early Results," CEPR Discussion Papers 676, C.E.P.R. Discussion Papers.
  5. Hamilton, C.B. & Winters, L.A., 1992. "Opening Up International Trade in Eastern Europe," Papers 511, Stockholm - International Economic Studies.
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Cited by:
  1. Alan A. Bevan & Saul Estrin & Paul G. Hare & Jon Stern, 2001. "Extending the economics of disorganization," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(1), pages 105-114, March.

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