Growth in Transition: What We Know, What We Don't and What We Should

Campos, Nauro F.; Coricelli, Fabrizio

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Growth in Transition: What We Know, What We Don't and What We Should

CEPR Discussion Paper No. 3246

74 Pages Posted: 4 Apr 2002

See all articles by Nauro F. Campos

Nauro F. Campos

University College London; University of Michigan at Ann Arbor - The William Davidson Institute; IZA Institute of Labor Economics

Fabrizio Coricelli

University of Siena - Department of Political and International Sciences ; Paris School of Economics (PSE); Centre for Economic Policy Research (CEPR)

There are 2 versions of this paper

Date Written: March 2002

Abstract

This essay surveys macroeconomic issues that marked the transition from centrally planned to market economy in Central and Eastern European and former Soviet Union countries. We first establish a set of stylized facts of the transition so far, namely: (1) output fell, (2) capital shrank, (3) labour moved, (4) trade reoriented, (5) the structure changed, (6) institutions collapsed, and (7) the transition costs. We then critically survey the theoretical literature on transition, discussing various explanations for the initial output fall as well as medium term issues, such as optimal speed of transition, disorganization, institutions and sectoral reallocation as a source of output dynamics. Last, we review the empirical literature to assess how well it translates the theoretical models and explains the stylized facts. The essay concludes with a succinct list of suggestions for future research.

Keywords: Transition, growth, Central and Eastern Europe, former Soviet Union, stylized facts

JEL Classification: O11, O40, P20, P23, P24, P30

Suggested Citation: Suggested Citation

Campos, Nauro F. and Coricelli, Fabrizio, Growth in Transition: What We Know, What We Don't and What We Should (March 2002). CEPR Discussion Paper No. 3246, Available at SSRN: https://ssrn.com/abstract=306429