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Description of Financial Reform in Eastern Europe

Of all the Eastern European post-communist states, Poland has followed the most radical approach to transforming its centralized economy into a market economy. The 'big bang' approach it adopted has never before been attempted on such a large scale and was a dramatic departure from the more gradualist processes favoured by countries such as Hungary and the Czech Republic. In this study, Gupta and Lensink present a model which simulates the effects of financial reforms in transitional economies, which they then apply to Poland for a variety of policy simulations. In a sequential manner, the authors develop models for households, commercial banks and firms, expanding their enquiry into the government sector, the central banking sector, the external sector and finally the supply side. These sub-sector models explicitly incorporate institutional features specific to the Polish economy. The estimated model is used to simulate the effects of a wide array of financial policies introduced in Poland, and these results are then used to assess the effectiveness of the policies analysed.
This is a timely and authoritative study which sheds new light on how a country's overall economic system responds when it pursues a 'big-bang' approach to marketization.

Title Information

ISBN:

9780415166683

Pages:

208 pages

Format:

Hardback

Product Code:

74931

Publisher:

Routledge

Published:

27/08/1998

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