This paper examines the sources of fluctuations in inflation and output in two leading transitioneconomy candidates for admission to the European Union (EU), Poland and Hungary. Using a rational expectations, dynamic open economy aggregate supply- aggregate demand model, we consider real oil...

This paper examines the sources of fluctuations in inflation and output in two leading transition- economy candidates for admission to the European Union (EU), Poland and Hungary. Using a rational expectations, dynamic open economy aggregate supply- aggregate demand model, we consider real oil...

The paper emphasizes the transition in Russia and the role institutions played before and during the process. In Russia, a big bang approach was applied. That is to say, transition was conducted all of a sudden, omitting important underlying reforms. This practice should function as a shock...