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Stabilization programs in Eastern Europe : a comparative analysis of the Polish and Yugoslav programs of 1990

Author

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  • Coricelli, Fabrizio
  • Rocha, Roberto de Rezende

Abstract

The authors compare the implementation of two apparently similar stabilization programs by two reforming socialist countries, launched two weeks apart (Dec. 1989 in Yugoslavia and Jan. 1990 in Poland). They investigate possible differences underlying the apparently similar programs that may account for better initial performance of Yugoslavia's program (a sharper reduction of inflation with smaller losses in output). The authors identify significant differences in initial conditions in the two countries as well as the sequence and degree of some policy measures. The differences may explain the difference in the early results. They also identify the most important issues the two countries must address in the second stage of reform. These include the unfreezing of nominal variables and resolving the critical structural problems affecting both economies. The authors conclude that the microfoundations of socialist and market economies are clearly different. These differences imply that in socialist economies the case for including incomes policy in stabilization programs may be stronger.

Suggested Citation

  • Coricelli, Fabrizio & Rocha, Roberto de Rezende, 1991. "Stabilization programs in Eastern Europe : a comparative analysis of the Polish and Yugoslav programs of 1990," Policy Research Working Paper Series 732, The World Bank.
    • Handle: RePEc:wbk:wbrwps:732
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    References listed on IDEAS

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    1. Rocha, Roberto de Rezende & Saldanha, Fernando, 1995. "Fiscal and quasi-fiscal deficits, nominal and real: measurement and policy issues," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 49(3), July.
    2. ROBERTO DE REZENDE Rocha, 1992. "Inflation And Stabilization In Yugoslavia," Contemporary Economic Policy, Western Economic Association International, vol. 10(4), pages 21-38, October.
    3. Calvo, Guillermo & Vegh, Carlos, 1991. "Exchange rate stabilization under imperfect credibility," MPRA Paper 20486, University Library of Munich, Germany.
    4. Feltenstein, Andrew & Jiming Ha, 1993. "An analysis of repressed inflation in three transitional economies," Policy Research Working Paper Series 1132, The World Bank.
    5. Koop, Gary & Osiewalski, Jacek & Steel, Mark F J, 2000. "A Stochastic Frontier Analysis of Output Level and Growth in Poland and Western Economies," Economic Change and Restructuring, Springer, vol. 33(3), pages 185-202.
    6. Jan Svejnar, 1991. "Microeconomic Issues in the Transition to a Market Economy," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 123-138, Fall.

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