The three countries took different stances in regards to economic policy; the Czech Republic pursued a shock therapy regime which aimed to stabilise the economy, Hungary’s policy was more relaxed whilst Poland had an aggressive reform programme. Regarding monetary policy the Czech Republic...

The Czech Republic, Hungary and Poland all experienced an initial reduction in the number of industries and an increase in unemployment, once they moved to a market driven economy. Over time the unemployment problem reduced in significance though Poland still experiences high levels to date....

Advocates of financial regulation, Arestis and Demetriades, argue that financial liberalisation does not impact on financial market efficiency and the allocation of investment. Results in this study find that Czech, Hungarian and Polish firms are subject to scrutiny when applying for credit. The...

The large and widening gap between economic performance in Eastern European transition economies and those of the former Soviet Union has been dubbed “the Great Divide” by Berglof and Bolton (2002). This paper provides a rationale for the gap based upon the concept of financial repression....

This paper analyzes the evolution in bank performance following the removal of legal restrictions on the entry of foreign banks in three transition economies: the Czech Republic, Hungary, and Poland. Two modes of foreign bank entry are considered: entry by Greenfield investments, and by foreign...

This paper investigates the impact of specific modes of entry of foreign banks, i.e. greenfield investment versus merger and acquisition, on bank performance in three transition economies – the Czech Republic, Hungary, and Poland. We use stochastic frontier analysis to model and measure the...

How valuable are the education and skills acquired under socialism in a market economy? This paper uses data for about 3 million Hungarian wage earners, from 1986 to 1998, to throw light on this question. We find that returns to schooling reach 10 percent early on and remain at this high level....

This essay surveys macroeconomic issues that marked the transition from centrally planned to market economy in Central and Eastern European and former Soviet Union countries. We first establish a set of stylized facts of the transition so far, namely: (1) output fell, (2) capital shrank, (3)...

Results support Arestis’s theory, that low real interest rates do not prevent economic growth (though he related it to the regulation debate). Here in the deregulation environment, it also stands. Results also support Shaw’s assertion that financial liberalisation increases the monetary...

Measurement of quality changes has proven to be an especially difficult aspect of calculating unbiased rates of inflation. We propose a new methodology of capturing quality improvements based on consumer focus groups and apply this methodology in an environment where quality changes might be...