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A Post-Keynesian Approach to the Transition Process

Author

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  • John Marangos

    (Department of Economics, Colorado State University)

Abstract

The historical experience of the successful postwar reconstruction of Western Europe, which was based upon Keynesian principles, totally contradicts the policies implemented in transition economies. Those countries that opted for price level adjustments during postwar reconstruction faced major hyperinflations. Although the economic conditions of transition economies could be argued to approximate the postwar reconstruction of Western Europe, during the period of reconstruction of Western Europe, price ceilings and subsidies were maintained and economic planning was implemented. Monetary and fiscal reforms and policies were adopted and the European Payments Union was established with the aim of restoring trade among countries. Exchange rates were controlled and capital flows restricted, and the US provided financial and technical support under the Marshall Plan. Lastly, markets were influenced and guided by an active state with the aim of supporting the initiatives of firms. The state was able to implement these policies only under a consensus process, which encouraged cooperation rather than conflict.

Suggested Citation

  • John Marangos, 2004. "A Post-Keynesian Approach to the Transition Process," Eastern Economic Journal, Eastern Economic Association, vol. 30(3), pages 441-465, Summer.
    • Handle: RePEc:eej:eeconj:v:30:y:2004:i:3:p:441-465
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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume30/V30N3P441_465.pdf
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    Citations

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    Cited by:

    1. Ichiro Iwasaki & Taku Suzuki, 2016. "Radicalism Versus Gradualism: An Analytical Survey Of The Transition Strategy Debate," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 807-834, September.
    2. Lino Sau, 2012. "Evolution of China's financial system and its impact on economic development," International Journal of Economic Policy in Emerging Economies, Inderscience Enterprises Ltd, vol. 5(1), pages 1-15.
    3. Turhan, Ibrahim M., 2008. "Why did it work this time: a comparative analysis of transformation of Turkish economy after 2002," MPRA Paper 31158, University Library of Munich, Germany.
    4. Vladimir Mihajlović & Gordana Marjanović, 2019. "Post-Kejnzijanska Kritika Novog Konsenzusa U Makroekonomiji I Pouke Za Tranzicione Privrede (Post-Keynesian Criticism Of The New Consensus Macroeconomics And Lessons For Transitional Economies)," Ekonomske ideje i praksa, Faculty of Economics and Business, University of Belgrade, issue 34, pages 21-32, September.
    5. Topalli, Margerita & Ivanaj, Silvester, 2016. "Mapping the evolution of the impact of economic transition on Central and Eastern European enterprises: A co-word analysis," Journal of World Business, Elsevier, vol. 51(5), pages 744-759.

    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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