First published in 1998, this volume responded to the recent fall of the Soviet Union and looks at the process of transitioning away from Socialist economies, including case studies in the former Soviet Union, Poland, Hungary, China, East Germany and other Socialist countries. Taking the view that economic and political indicators suggest a lack of success in the post-Soviet transformation process, Kızılyallı argues that they have been unsuccessful due to poor planning. Kızılyallı notes an abandonment of the previous system and an ineffective implementation of market capitalism which have led to these negative outcomes. The new method developed herein provides a partial solution through estimating the correct exchange rate based on world prices and under conditions of macroeconomic equilibrium, while also allowing planning for sequencing market reforms. Reform issues are then discussed, followed by the reform experiences of Poland, Hungary, East Germany, China and the former Soviet Union. Lastly, developments in macroeconomic theory are reviewed in light of these case studies. Kızılyallı concludes that both neoclassical and new Keynesian theories fail to provide an economically meaningful framework for analysis of current economic and employment problems, nor for their cure.
Table of Contents
1. Need for a New Approach in Transforming the Socialist Economies. 2. The Proposed Methodology. 3. Benefits of a Systematic Methodology for Immediate Transformation of Socialist Economies into Free Market Systems. 4. Conclusion. 5. Points of Clarification. 6. Some Further Thoughts, Remarks and Observations. 7. Other Forecasting and Analysis Methods Developed for Countries in Transition. 8. High Inflation Problem. 9. Dollarization. 10. Demise of CMEA and Collapse of CMEA Trade and Inter-Republican Trade of the Former Soviet Union. 11. Hardening the Soft Budget Constraint. 12. The Enterprise Reform. 13. Privatization. 14. The Polish Reform Experience. 15. The Hungarian Reform Experience. 16. The East German Experience. 17. Recent Developments in the Other Reforming Socialist Countries. 18. Chinese Reform Experience. 19. The Experience of the Former Soviet Union. 20. The Theoretical Foundations of Reform Programs. 21. Phillips Curve Trade-Off. 22. A Review of Country Experiences.