The second transition: Eastern Europe in perspective

Stefania Fabrizio, Daniel Leigh and Ashoka Mody

No 366, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper studies the global trade and financial market integration of the countries in Eastern Europe. The countries of Eastern Europe achieved two remarkable transitions in the short period of the last two decades: from plan to market and, then, in the run-up to and entry into the European Union, they rode a wave of global trade and financial market integration. Focusing on the second transition, this paper reaches three conclusions. First, by several metrics, East European and East Asian growth performances were about on par from the mid-1990s; both regions far surpassed Latin American growth. Second, the mechanisms of growth in East Europe and East Asia were, however, very different. East Europe relied on a distinctive—often discredited—model, embracing financial integration with structural change to compensate for appreciating real exchange rates. In contrast, East Asia contained further financial integration and maintained steady or depreciating real exchange rates. Third, the ongoing financial turbulence has, thus far, not had an obviously differential impact on emerging market regions: rather, the hot spots in each region reflect individual country vulnerabilities. If the East European growth model is distinctive, is it sustainable and replicable? The paper speculates on the possibilities.

Keywords: Growth; Transition; Trade; Financial Integration; The Second Transition: Eastern Europe in Perspective; Economic Papers (search for similar items in EconPapers)
JEL-codes: F21 F43 O16 O43 O50 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2009-03
References: Add references at CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://ec.europa.eu/economy_finance/publications/pages/publication14293_en.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0366

Access Statistics for this paper

More papers in European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission Contact information at EDIRC.
Bibliographic data for series maintained by ECFIN INFO (ecfin-info@ec.europa.eu).