The effects of labor market segmentation in a two-sector open economy model are examined. The model demonstrates how the structure of the labor market affects the real exchange rate, and is then used to examine the effects of two common labor market policies: increasing the degree of primary...

The declines in economic activity experienced by Bulgaria, the Czech and Slovak Federal Republic, and Romania in the period since market-oriented reforms were initiated are analyzed. After reviewing developments in these three countries, the paper empirically investigates two questions that are...