The Fall and Recovery of the Cuban Economy in the 1990's: Mirage or Reality?

Ernesto Hernández-Catá

No 2001/048, IMF Working Papers from International Monetary Fund

Abstract: The collapse of the Cuban economy following the cessation of Soviet assistance gave way to a strong recovery in 1994-96. There are three possible explanations for this recovery: (i) that it never took place; (ii) that it reflected a surge in productivity resulting from stabilization and liberalization in 1993-94; or (iii) that it resulted from a favorable aggregate demand shock. The second explanation-the most persuasive-suggests that a strong and durable expansion will probably not be achieved on the basis of present policies, but that the benefits of a full liberalization of the economy are likely to be considerable.

Keywords: WP; fixed capital; GDP deflator; balance of payments; liberalization measure; output index; Cuba; growth; productivity; liberalization; transition; growth performance; price liberalization; demand shock; Total factor productivity; Employment; Labor force; Price controls; Baltics; Eastern Europe; Central and Eastern Europe (search for similar items in EconPapers)
Pages: 25
Date: 2001-05-01
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