The demise of the CMEA trading system in 1991 and the shift to convertible currency settlements and world market prices was expected to bring about a severe contraction of intra-group trade, coupled with large imbalances in trade between Eastern Europe and the former Soviet Union. The observed...

This paper discusses when and how to introduce foreign exchange convertibility in the process of transformation of the socialist centrally-planned economies into market economies based on private property. It elucidates the need for `robust sequencing' in a programme of economic reforms and the...

The paper analyses the role of currency convertibility in the process of economic transition in Eastern Europe and discusses alternative institutional options for achieving this difficult task. It shows that an early transition to convertibility is an indispensable requirement for the success of...

Recent events, historical evidence and geographical proximity suggest that the six EFTAns and twelve Central and East European countries (CEECs) are natural trading partners. This paper evaluates this suggestion by estimating the potential for EFTA-CEEC trade using the gravity model of Wang and...

This paper fits a gravity model to the trade of 76 market economies. It then applies the model to data on East European economies to estimate what their trading potential might have been, had behaved like market economies in the mid-1980s. At existing levels of national income, the...