How I Learned to Stop Worrying and Love the Crisis

Jan Fidrmuc and Ariane Tichit (ariane.tichit@u-clermont1.fr)

No 3720, CESifo Working Paper Series from CESifo

Abstract: We investigate the effects of economic crises on the subsequent economic performance, economic reform, democratization and institutional change. Our analysis is based on a sample of post-communist countries, most of which experienced severe economic crises during the 1990s. We find that the severity of crisis has had a positive impact on the subsequent pace of economic reform, economic growth and, with a delay, on investment and institutional change. Episode of high inflation, moreover, translate into lower subsequent inflation. Crises thus appear to serve as catalysts of reform and institutional change and lead to better long-term economic performance.

Keywords: crisis; transition; growth; inflation; reform; institutions (search for similar items in EconPapers)
JEL-codes: O11 O47 P27 (search for similar items in EconPapers)
Date: 2012
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Related works:
Journal Article: How I learned to stop worrying and love the crisis (2013)
Working Paper: How I learned to stop worrying and love the crisis (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3720

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