Major changes have occurred in the structure of former centrally planned economies, including a sharp rise in the share of services in GDP, employment and international transactions. However, large differences exist across transition economies with respect to services intensity and services...

In this Paper we present an overview of a number of issues relating to the equilibrium exchange rates of the new EU member states from Central and Eastern Europe. In particular, we present a critical overview of the various methods available for calculating equilibrium exchange rates and discuss...

This Paper examines the consequences of interactions between the bank lending channel and the traditional interest rate and exchange rate channels on the effectiveness of the monetary policy transmission in Poland since 1994. First, we develop a small open-economy credit-augmented model. Under...

In their privatization programs, transition governments have frequently given away shares (so-called `mass privatization'), while maintaining significant minority ownership. We explain the rationality of these policies for an expected net-revenue maximizing government. Our argument rests on a...

Local officials in China have strongly supported new non-state firms, yet other officials in transition countries have often strongly hindered them. We argue that a likely cause of these sharp differences in behaviour is differences in the source of government revenue. Local revenue in China...

This paper investigates the role of structural reforms –privatization, financial reform and trade liberalization– as determinants of FDI inflows based on newly constructed dataset on structural reforms for 19 Latin American and 25 Eastern European countries between 1989 and 2004. Our main...

Conventional wisdom suggests that the stocks of human capital were one of the few positive legacies from communism. However, if factories under communism were so inefficient, why would the education system not have been? Using the education production function approach and new data on...

The transition from centrally planned to market economy involves a process of massive occupational change that has been largely neglected in the literature. This paper investigates this process using data from the 1995 Estonian Labour Force Survey. We find that between 35 and 50 percent of wage...

This paper summarizes some of the findings of Boeri, Burda and Köllo (1998), which provide an overview of the state of labour markets in the transition economies of Central and Eastern Europe. It argues that a hasty ‘return to Europe’ with respect to labour market policies may not be in the...

According to more recent theories on the optimal capital structure, the availability of external financing is not always guaranteed, or it may come at different costs, depending on the methods of financing used (debt vs. equity, long-term debt vs. short-term debt, etc.). Under such...