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Pressure to Adjust: Consequences for the OECD Countries from Reforms in Eastern Europe

Author

Listed:
  • Robert Holzmann

    (University of Saarland, University of Munich)

  • Christian Thimann

    (University of Saarland, University of Munich)

  • Angela Petz

    (University of Saarland, University of Munich)

Abstract

The opening of formerly planned economies to the world has not only profound consequences for these Central and Eastern European economies. There are also substantial effects on the economies of Western Europe, resulting from enhanced price competition in product markets, migration and capital flows. The macroeconomic effects and adjustment requirements in the OECD countries are fundamentally determined by the two central but not mutually exclusive growth options for the reform countries, which are analysed in the paper: The option of an import-led growth in Eastern Europe, resulting from capital transfers from the West in order to assist the modernisation and investment process in the East, and the option of an export-led growth, allowing for the unrestricted entering of Western markets and imitating the experience of Asian economies. The estimated magnitudes and likely economic effects speak in favour of the export-led growth option, but under both options the governments in the West are challenged.

Suggested Citation

  • Robert Holzmann & Christian Thimann & Angela Petz, 1994. "Pressure to Adjust: Consequences for the OECD Countries from Reforms in Eastern Europe," International Trade 9403001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpit:9403001
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    References listed on IDEAS

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    Cited by:

    1. Robert Holzmann & Yves Hervé & Roland Demmel, 1996. "The maastricht fiscal criteria: Required but ineffective?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 23(1), pages 25-58, February.
    2. Matthieu Bussière & Bernd Schnatz, 2009. "Evaluating China’s Integration in World Trade with a Gravity Model Based Benchmark," Open Economies Review, Springer, vol. 20(1), pages 85-111, February.
    3. Potratz, Wolfgang (Ed.) & Widmaier, Brigitta (Ed.), 1998. "East European integration and new division of labour in Europe: Workshop documentation," Graue Reihe des Instituts Arbeit und Technik 1998-09, Institut Arbeit und Technik (IAT), Westfälische Hochschule, University of Applied Sciences.
    4. Johannes Bröcker & Martin Schneider, 2002. "How Does Economic Development in Eastern Europe Affect Austria's Regions? A Multiregional General Equilibrium Framework," Journal of Regional Science, Wiley Blackwell, vol. 42(2), pages 257-285, May.
    5. Fidrmuc, Jarko, 1999. "Trade Diversion in the 'Left-Outs' in the Eastward Enlargement of the European Union," Transition Economics Series 8, Institute for Advanced Studies.

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    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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