The Evolution of Output in Transition Economies: Explaining the Differences

IMF Working Paper 99/73

Conference Paper, The Nobel Symposium in Economics - The Economics of Transition, Stockholm, September 1999

Posted: 9 Nov 1999

See all articles by Andrew Berg

Andrew Berg

International Monetary Fund (IMF) - Developing Country Studies Division

Eduardo Borensztein

Inter-American Development Bank (IADB)

Ratna Sahay

International Monetary Fund (IMF) - Developing Country Studies Division; National Bureau of Economic Research (NBER)

Jeromin Zettelmeyer

Peter G. Peterson Institute for International Economics; CEPR

Date Written: May 1999

Abstract

What are the relative roles of macroeconomic variables, structural policies, and initial conditions in explaining the time path of output in transition and the large observed differences in output performance across transition economics? Using a sample of 26 countries, this paper follows a general-to-specific modeling approach that allows for differential effects of policies and initial conditions on the private and state sectors and for time-dependent effects of initial conditions. While showing some fragility to model specification, the results point to the preeminence of structural reforms over both initial conditions and macroeconomic variables in explaining cross-country differences in performance and the timing of the recovery.

Keywords: transition economies, growth, output decline, recovery, structural reforms

JEL Classification: P24, P27, 057

Suggested Citation

Berg, Andrew and Borensztein, Eduardo and Sahay, Ratna and Zettelmeyer, Jeromin, The Evolution of Output in Transition Economies: Explaining the Differences (May 1999). IMF Working Paper 99/73; Conference Paper, The Nobel Symposium in Economics - The Economics of Transition, Stockholm, September 1999. Available at SSRN: https://ssrn.com/abstract=189437

Andrew Berg

International Monetary Fund (IMF) - Developing Country Studies Division ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8843 (Phone)
202-589-8843 (Fax)

Eduardo Borensztein (Contact Author)

Inter-American Development Bank (IADB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Ratna Sahay

International Monetary Fund (IMF) - Developing Country Studies Division ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-7181 (Phone)
202-623-7271 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jeromin Zettelmeyer

Peter G. Peterson Institute for International Economics ( email )

1750 Massachusetts Avenue, NW
Washington, DC 20036
United States

CEPR ( email )

London
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
1,861
PlumX Metrics