The Transition Economies After Ten Years

This paper summarizes the macroeconomic performance of the transition economies. We first review the initial conditions confronting these economies, the reform strategy that was proposed, and the associated controversies that arose a decade ago. We then account for the widely different outcomes, highlighting the role of exogenous factors and the macroeconomic and structural policies adopted by the countries. We find that both stabilization policies and structural reforms, particularly privatization, contribute to growth. We also conclude that the faster is the speed of reforms, the quicker is the recovery and the higher is growth.Transition economies;Economic growth;inflation, inflation rates, transition period, price liberalization, political economy, inflation stabilization, transition countries, macroeconomic performance, inflation performance, output growth, trade liberalization, exchange rate regimes, foreign exchange, domestic investment, short-term debt, high inflation, trade reform, unemployment rate, dynamic effects, external financing, internal liberalization, annual inflation, rates of inflation, regional trade, competition policy, fixed investment, real output, lower inflation, income distribution, exchange rate regime, high rates of inflation, monetary policy, fixed capital formation, oil prices, domestic demand, inflation tax, inflationary spiral, interest groups, relative prices, inflation rising, macroeconomic stability