The second transition: Eastern Europe in perspective

Stefania Fabrizio, Daniel Leigh, Ashoka Mody

Research output: Chapter in Book/Report/Conference proceedingChapter

5 Scopus citations


The countries of Eastern Europe have achieved two remarkable transitions in the short period of the last two decades: from plan to market and, then, in the run-up to and entry into the European Union, riding a wave of global trade and financial market integration. Focusing on the second transition, this paper reaches three conclusions. First, by several metrics, East European and East Asian growth performances have been about on par since the mid-1990s; both regions have far surpassed Latin American growth. Second, the mechanisms of growth in East Europe and East Asia have been very different. East Europe has relied on a distinctive-often discredited-model, embracing financial integration, with structural change to compensate for appreciating real exchange rates. In contrast, East Asia has contained further financial integration and maintained steady or depreciating real exchange rates. Third, the ongoing financial turbulence has dulled the sheen on East European performance but, thus far, has not obviously differentiated emerging market regions: rather, the hot spots in each region reflect individual country vulnerabilities. The paper, in closing, speculates on whether the East European growth model is sustainable and replicable.

Original languageEnglish (US)
Title of host publicationFive Years of an Enlarged EU
Subtitle of host publicationA Positive Sum Game
PublisherSpringer Berlin Heidelberg
Number of pages30
ISBN (Print)9783642125157
StatePublished - 2010
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • General Economics, Econometrics and Finance
  • General Business, Management and Accounting


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