Abstract

The economic transformation of former centrally planned economies has been accompanied by large declines in output, significant changes in relative prices, and, at least initially, rapid increases in inflation and declines in living standards. Although much of the decline in living standards is attributable to the economic dislocations resulting from the breakdown of the trading regime, the breakup of the Baltics, Russia, and other former Soviet Union countries (BRO), and loose national financial policies, a significant part of it has stemmed from reform policies, which, in the short run, have increased the prices of essential commodities and reduced employment opportunities.

Issues and Recent Experience
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