International Trade and Restructuring in Eastern Europe

Gacs, J. & Winckler, G. (1994). International Trade and Restructuring in Eastern Europe. Heidelberg: Physica-Verlag. ISBN 3-7908-0759-1

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Abstract

It has been widely recognized that international economic relations play a crucial role in the transition of countries of Eastern and Central Europe. The scope, speed, and success of the efforts to transform the formerly centrally planned economies to market economies have increasingly become dependent on the pattern these countries have in their relation to the rest of the world.

Many of the new governments in these countries have found that the most appropriate fixed point (the so-called nominal anchor), to which stabilization measures should be attached, is the nominal exchange rate of their currency. A more reasonable exchange rate than that in the former system of central planning has required a full system of reorganization of trade and exchange relations including the establishment of some kind of currency convertibility and deregulation of international trade transactions. Part I of the book deals with exchange rate regimes that have played and may play a role in supporting political and macroeconomic stabilization, on the one hand, and competitiveness of domestic production, on the other.

For foreign trade the structural changes had two implications: (1) shift in the sectoral and geographical composition of trade and (2) the modification of the behavior of enterprises. Part II of the book covers the first dimension and Part III is devoted to the changes in trade-related enterprise behavior.

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