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Supply Responses in the Economies of the Former Soviet Union

Author

Listed:
  • 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.

Suggested Citation

  • Paul Hare & Alan Bevan & Jon Stern & Saul Estrin, 2000. "Supply Responses in the Economies of the Former Soviet Union," CERT Discussion Papers 0009, Centre for Economic Reform and Transformation, Heriot Watt University.
  • Handle: RePEc:hwe:certdp:0009
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    File URL: http://www2.hw.ac.uk/sml/downloads/cert/wpa/2000/dp0009.pdf
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    References listed on IDEAS

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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, September.
    2. Hamilton, C.B. & Winters, L.A., 1992. "Opening Up International Trade in Eastern Europe," Papers 511, Stockholm - International Economic Studies.
    3. Olivier Blanchard & Michael Kremer, 1997. "Disorganization," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1091-1126.
    4. 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.
    5. Dani Rodrik, 1992. "Making Sense of the Soviet Trade Shock in Eastern Europe: A Framework and Some Estimates," NBER Working Papers 4112, National Bureau of Economic Research, Inc.
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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.

    More about this item

    Keywords

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

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects

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