Evidence of European Trade and Investment U-Shaping Industrial Output in Bulgaria, Hungary, Poland and Romania

Conference Paper No. F28, 4th Annual International Conference on Transition Economics, Beijing

Journal of Comparative Economics, Vol. 27, No. 4, 1999

34 Pages Posted: 29 Sep 1999 Last revised: 7 Jul 2010

See all articles by Alexandre Repkine

Alexandre Repkine

Konkuk University - Department of Economics

Patrick Paul Walsh

UCD; Institute for the Study of Labor (IZA)

Date Written: July 1, 1999

Abstract

Industrial output in Central and Eastern Europe evolved in a U-Shape during the first seven years of transition. The literature explains the initial collapse of industrial output as an inefficient outcome driven by supply side distortions that constrain the transition process. We show that the U-Shape experience of industrial sectors is an outcome driven by an intra-sector change, induced by investment demand shocks, in the market orientation of production away from products traditionally sold into the CMEA market and towards products traditionally sold into the EU market. This revisionist view has important implications for policy formation.

JEL Classification: F43, 033, P23

Suggested Citation

Repkine, Alexandre and Walsh, Patrick Paul, Evidence of European Trade and Investment U-Shaping Industrial Output in Bulgaria, Hungary, Poland and Romania (July 1, 1999). Conference Paper No. F28, 4th Annual International Conference on Transition Economics, Beijing, Journal of Comparative Economics, Vol. 27, No. 4, 1999, Available at SSRN: https://ssrn.com/abstract=183688 or http://dx.doi.org/10.2139/ssrn.183688

Alexandre Repkine (Contact Author)

Konkuk University - Department of Economics ( email )

1 Hwayang-dong
Kwangjin-gu
Seoul 143-701
Korea

Patrick Paul Walsh

UCD ( email )

University College Dublin
Belfield, Dublin Dublin 4
Ireland

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany