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Foreign Trade in Eastern Europe's Transition: Early Results

In: The Transition in Eastern Europe, Volume 2: Restructuring

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  • Dani Rodrik

Abstract

By the end of 1991, Czechoslovakia, Hungary and Poland have achieved a substantial degree of openness to foreign trade. In all three countries, trade is now de-monopolized and licensing and quotas playa very small role. Exchange controls have virtually disappeared for current-account transactions. Judging by partner statistics, export performance has been impressive in all three countries, and import booms are under way in at least Hungary and Poland as well. However, there is no evidence that exporters have had any success in finding Western markets for the exports they have lost in Eastern markets. The collapse of the CMEA represents a significant shock, amounting to a loss of real income of 3 1/2 percent of GDP in Poland and 7-8 percent of GDP in Hungary and Czechoslovakia. Export performance is attributable to exchange-rate policy in part, but the collapse of domestic demand has possibly played an even more important role. Finally, trade liberalization so far appears to have had little effect on price discipline, in large part because of the substantial devaluations that have accompanied it
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Suggested Citation

  • Dani Rodrik, 1994. "Foreign Trade in Eastern Europe's Transition: Early Results," NBER Chapters,in: The Transition in Eastern Europe, Volume 2: Restructuring, pages 319-356 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:6730
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    References listed on IDEAS

    as
    1. Murphy, Kevin M. & Shleifer, Andrei, 1997. "Quality and trade," Journal of Development Economics, Elsevier, vol. 53(1), pages 1-15, June.
    2. repec:wsi:wschap:9789813108448_0013 is not listed on IDEAS
    3. Peter B. Kenen, 1991. "Transitional Arrangements for Trade and Payments among the CMEA Countries," IMF Staff Papers, Palgrave Macmillan, vol. 38(2), pages 235-267, June.
    4. Gabor Oblath & David Tarr, 2017. "The Terms-of-Trade Effects from the Elimination of State Trading in Soviet-Hungarian Trade," World Scientific Book Chapters,in: Trade Policies for Development and Transition, chapter 13, pages 295-313 World Scientific Publishing Co. Pte. Ltd..
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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • P33 - Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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