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Decline and Growth in Transition Economies: A Meta-Analysis

Listed author(s):
  • Ichiro Iwasaki

    ()

  • Kazuhiro Kumo

    ()

    (Institute of Economic Research, Hitotsubashi University)

Immediately after the collapse of socialism, the countries of Central and Eastern Europe and the former Soviet Union fell into a serious economic crisis, after which they experienced a gradual recovery. Therefore, without exception, these countries followed a J-curved growth path. However, there were marked differences among them in the length and depth of the crisis and the speed of recovery. In this paper, we perform a comparative meta-analysis of the effect size and statistical significance of structural change, transformation policy, the legacy of socialism, inflation, and regional conflict in order to elucidate the mechanism that generated the J-shaped trajectory in transition economies. The meta-synthesis, which employs 3,279 estimates drawn from 123 previous studies, revealed that while the growth-enhancing effects of structural change and transformation policy were small yet significant, inflation and regional conflict had a highly significant and strongly negative effect on output. In addition, the legacy of socialism might exacerbate the decline in production in the early stages of transition. The meta-regression analysis that simultaneously controls for various research conditions and the assessment of publication selection bias provides supporting evidence for the results obtained from the meta-synthesis.

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Paper provided by Kyoto University, Institute of Economic Research in its series KIER Working Papers with number 951.

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Length: 68pages
Date of creation: Oct 2016
Handle: RePEc:kyo:wpaper:951
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