Economic Reform and Structural Adjustment in East European Industry

By Eduardo Borensztein, Jonathan David Ostry

June 1, 1994

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Eduardo Borensztein, and Jonathan David Ostry. Economic Reform and Structural Adjustment in East European Industry, (USA: International Monetary Fund, 1994) accessed November 23, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

A consistent set of disaggregated industrial output data for four Eastern European countries is examined In order to determine the extent to which structural adjustment has taken place since the initiation of market-oriented reform. The latter created a massive relative price shock whose affects on the structure of the industrial sectors of these economies is shown to have been relatively small, at least one to two years after the reforms. An implication is that one argument in favor of more gradualist reform—based on the premise that more gradualism implies a smaller output cost in the short run—is questionable. By and large in these economies, the output cost associated with the removal of relative price distortions may still have to be faced.

Subject: Economic sectors, Energy prices, Industrial sector, Inflation, Macroeconomic risks, National accounts, Prices, Public financial management (PFM)

Keywords: CMEA country, Country, Country-effect dummy, Eastern Europe, Economy, Energy prices, Factor, Industrial sector, Industry effects f, Industry factor, Industry shock, Inflation, Liberalization, Macroeconomic risks, State enterprise, State enterprise sector, WP

Publication Details

Pages:

18
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1994/080
Stock No:

WPIEA0801994
ISBN:

9781451955507
ISSN:

1018-5941

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