The Output Decline in the Aftermath of Reform: The Cases of Bulgaria, Czechoslovakia, and Romania

ByJonathan David Ostry, Eduardo Borensztein, Dimitri G Demekas

July 1, 1992

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

This paper analyzes the declines in economic activity experienced by Bulgaria, the Czech and Slovak Federal Republic (CSFR), and Romania in the period since the initiation of market-oriented reforms in these countries. The paper reviews developments in the three countries and empirically investigates two questions that are key to the interpretation of the output decline: First, to what extent does the output fall reflect “structural change” (or a reallocation of resources across sectors) rather than a conventional recession? Second, to what extent have demand-side or supply-side forces been dominant in generating the output decline?

Subject: Comparative advantage, Economic sectors, Employment, Energy pricing, Expenditure, Exports, Industrial sector, International trade, Labor

Keywords: Comparative advantage, Eastern Europe, economic activity, economic system, Employment, Energy pricing, enterprise manager, Exports, Industrial sector, output change, output decline, price reform, price-output correlation, privatization program, supply and demand, U.S. dollar, WP

Pages:
60
Volume:
1992
DOI:
https://doi.org/10.5089/9781451965711.001
Issue:
059
Series:
Working Paper No. 1992/059
Stock No:
WPIEA0591992
ISBN:
9781451965711
ISSN:
1018-5941

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Notes

Also published in Staff Papers, Vol. 40, No. 1, March 1993.

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