Output Decline in Eastern Europe: Unavoidable, External Influence or Homemade?

The first phase of transition to a market economy in Central and Eastern Europe was characterized by a sharp output decline. The fall in real GDP exceeded 20% while real industrial production decreased even by 40%. Output Decline in Eastern Europe aims at providing comprehensive, multi-factor explanations for this unique, painful experience. Various hypotheses are analyzed: credit and fiscal policies may have been too tight; the collapse of the CMEA and the USSR came as a shock; domestic pr...