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Optimal Speed of Transition: Micro Evidence from the Czech Republic

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  • Stepan Jurajda
  • Katherine Terrell

Abstract

We consider the growing theoretical literature on the optimum speed of transition (OST) and explore its validity using micro data from a transition economy. First, we ask whether the OST theories focus on the empirically most important job and worker reallocation flows. Second, we examine the relationship between these flows suggested by the theory. The empirical evidence from the Czech Republic appears to match the theory's prescriptions. It underscores the main policy implication of the Aghion and Blanchard (1994) model that early support for private job creation is the recipe for a successful transition.

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  • Stepan Jurajda & Katherine Terrell, 2000. "Optimal Speed of Transition: Micro Evidence from the Czech Republic," William Davidson Institute Working Papers Series 355, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2000-355
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    References listed on IDEAS

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    1. Vladislav Flek & Jiri Vecernik, 1998. "Employment and Wage Structures in the Czech Republic," Archive of Monetary Policy Division Working Papers 1998/03, Czech National Bank.
    2. Sorm, Vit & Terrell, Katherine, 2000. "Sectoral Restructuring and Labor Mobility: A Comparative Look at the Czech Republic," Journal of Comparative Economics, Elsevier, vol. 28(3), pages 431-455, September.
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    8. Stepan Jurajda, 2000. "Gender Wage Gap and Segregation in Late Transition," William Davidson Institute Working Papers Series 306, William Davidson Institute at the University of Michigan.
    9. Faggio, Giulia & Konings, Jozef, 1999. "Gross Job Flows and Firm Growth in Transition Countries: Evidence Using Firm Level Data on Five Countries," CEPR Discussion Papers 2261, C.E.P.R. Discussion Papers.
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    12. Tito Boeri, 1999. "Transition with Labour Supply," William Davidson Institute Working Papers Series 274, William Davidson Institute at the University of Michigan.
    13. Zuzana Brixiova, 1997. "On the Speed of Transition in Central and Eastern Europe; Does On-the-Job Search Matter?," IMF Working Papers 97/102, International Monetary Fund.
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    Cited by:

    1. Balla, Katalin & Köllo, János & Simonovits, András, 2008. "Transition with heterogeneous labor," Structural Change and Economic Dynamics, Elsevier, vol. 19(3), pages 203-220, September.
    2. J. David Brown & John S. Earle, 2002. "Job Reallocation and Productivity Growth under Alternative Economic Systems and Policies: Evidence from the Soviet Transition," CERT Discussion Papers 0208, Centre for Economic Reform and Transformation, Heriot Watt University.
    3. Jan Svejnar, 2006. "Strategies for growth : Central and Eastern Europe," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 205-233.
    4. Jan Svejnar, 2002. "Transition Economies: Performance and Challenges," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 3-28, Winter.
    5. Stepan Jurajda & Janet Mitchell, 2001. "Markets and Growth," William Davidson Institute Working Papers Series 382, William Davidson Institute at the University of Michigan.
    6. Brown, J. David & Earle, John S., 2002. "Gross Job Flows in Russian Industry Before and After Reforms: Has Destruction Become More Creative?," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 96-133, March.
    7. Svejnar, Jan, 2007. "China in Light of the Performance of Central and East European Economies," IZA Discussion Papers 2791, Institute for the Study of Labor (IZA).
    8. Tichit, Ariane, 2006. "The optimal speed of transition revisited," European Journal of Political Economy, Elsevier, vol. 22(2), pages 349-369, June.
    9. Jan Svejnar, 2002. "Labor Market Flexibility in Central and East Europe," William Davidson Institute Working Papers Series 496, William Davidson Institute at the University of Michigan.
    10. Maxim Bouev, 2004. "Diverging Paths: Transition in the Presence of the Informal Sector," William Davidson Institute Working Papers Series 2004-689, William Davidson Institute at the University of Michigan.
    11. J David Brown & John S Earle, 2006. "Job Reallocation and Productivity Growth in the Ukrainian Transition," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 48(2), pages 229-251, June.
    12. J. David Brown & John S. Earle, "undated". "The Reallocation of Workers and Jobs in Russian Industry: New Evidence on Measures and Determinants," Upjohn Working Papers and Journal Articles jse20031, W.E. Upjohn Institute for Employment Research.
    13. Brown, J. David & Earle, John S., 2004. "Economic Reforms and Productivity-Enhancing Reallocation in the Post-Soviet Transition," IZA Discussion Papers 1044, Institute for the Study of Labor (IZA).
    14. Maxim Bouev, 2001. "Labor Supply, Informal Economy and Russian Transition," William Davidson Institute Working Papers Series 408, William Davidson Institute at the University of Michigan.
    15. Jan J. Rutkowski & Stefano Scarpetta, 2005. "Enhancing Job Opportunities : Eastern Europe and the Former Soviet Union," World Bank Publications, The World Bank, number 7408, September.
    16. Randall K. Filer & Jan Hanousek, 2002. "Data Watch: Research Data from Transition Economies," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 225-240, Winter.
    17. Randolph Luca Bruno, 2003. "Speed of Transition, Unemployment Dynamics and Nonemployment Policies: Evidence from the Visegrad Countries," LEM Papers Series 2003/23, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    18. J. David Brown & John S. Earle, 2003. "The reallocation of workers and jobs in Russian industry," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(2), pages 221-252, June.

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