II. Macroeconomic Effects on Western Europe of the Opening Up of Eastern Europe: Some Simulation Results


There is little doubt that the opening up of the previously centrally planned economies (PCPEs) and their transformation into market-oriented structures will ultimately have a profound impact on the economies of Western Europe and the rest of the industrialized world. Large investment opportunities in the East, large flows of world savings into this region, new markets for Western products, the normalization of the flow of primary products (mainly energy) from East to West, and ultimately a west-bound flow of manufactured products and savings are some of the channels through which the transformation of the PCPEs may affect the industrial countries.