Contagion from East Asia imposed a severe "stress test" on the market-oriented reforms of transition economies. We find that the portfolio reallocations of investors differentiated sharply among these economies at the height of the East Asian turmoil, appearing clearly in the relative movements...

The contagion effects emanating from the recent East Asian turmoil provide an interesting test of the strength of the foundations for macroeconomic and financial stability laid by the post-communist transition and how this strength varies across central and eastern Europe and the CIS. The...