Applied cointegration analysis has much to gain from strong links with economic theory. For example, the current generation of equilibrium macroeconomic models have simple predictions for cointegrating vectors. These models also suggest that important information about the economic structure can...

The objective of this Paper is to propose a number of alternative decentralized interpretations of representative agent style stochastic growth economies and to explore their implications for the generality of this model construct. Under our first interpretation, firms exist forever and...

We identify the determinants of capital movements in an ‘augmented-Solow’ model where capital mobility is restricted to a subset of capital assets. We then test the prediction of the neoclassical model and find that it is consistent with the evidence on net capital flows in a cross-section...

This paper studies the policy determinants of economic transition and estimates the demand for labor in the infant private sector in urban China. We show that a reform that untied access to housing in urban areas from working for the state sector accounts for more than a quarter of the overall...

The paper discusses the institutional arrangements of a multilateral payments union for the Commonwealth of Independent States. It starts with an analysis of the risks of a non-cooperative solution, which would lead to serious liquidity and solvency problems and thus curtail inter-republican...

The paper discusses alternative options for a future monetary order in the area of the Soviet Union. Its main focus is on two questions: Under what conditions would a common rouble currency area be compatible with fiscal discipline and effective financial control over the large numbers of...

After a brief period of liberal agricultural policies, Central and East European (CEE) countries have begun to rely increasingly on price subsidies and trade restrictions. We outline the situation of CEE agriculture and describe current policies. Scarce government funds could be better used to...

This study examines the scope for redistributive government policies based on progressive income taxation and direct income transfers. We concentrate on the case of Hungary. We first survey recent developments in the economic circumstances of the household sector and changes in the Hungarian...

This paper assembles and reviews data on growth performance for East Germany. Conclusions are only tentative, as data reliability is still poor. Examining factor growth and total factor productivity performance, the paper arrives at three main conclusions. First, large-scale dismantling of...

The paper discusses the strong output decline in the countries of Central and Eastern Europe. It starts from the puzzling observation that the former CSFR, Hungary and Poland experienced a relatively similar decline in output in spite of completely different stabilization and transformation...