Rc. Stuart et Cm. Panayotopoulos, Decline and recovery in transition economies: The impact of initial conditions, POST-SOV GE, 40(4), 1999, pp. 267-280
This paper examines and analyzes the stylized facts of the contemporary tra
nsition economies, specifically the initial decline and subsequent variable
recovery of real gross domestic product. We test the argument that a major
source of observed differences in magnitude and duration of decline is the
extent of initial disequilibrium of these economies. We specify and estima
te a simple econometric model relating the observed pattern of decline to i
mportant pre-transition disequilibrium forces, especially macroeconomic dis
tortions. Microeconomic distortions, conceptual, and measurement issues are
considered as well. The transition experiences of former Soviet republics
are compared with those of countries in Eastern Europe. Journal of Economic
Literature, Classification Numbers: O10, P20, P50. 6 figures, 1 table, 21
references.