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J-Curve in Transition Economies: A Large Meta-analysis of the Determinants of Output Changes

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  • Ichiro Iwasaki

    (Hitotsubashi University)

  • Kazuhiro Kumo

    (Hitotsubashi University)

Abstract

Immediately after the collapse of socialism, the countries of Central and Eastern Europe and the former Soviet Union fell into a serious output decline, after which they experienced a gradual recovery. Therefore, without exception, these countries followed a J-curved growth path. However, there were marked differences among them in the length and depth of the output fall and the speed of recovery. In this paper, we perform a comparative meta-analysis of the effect size and statistical significance of structural change, transformation policy, the legacy of socialism, inflation, and regional conflict in order to elucidate the mechanism that generated the J-shaped trajectory in transition economies. The meta-synthesis, which employs 3279 estimates drawn from 123 previous studies, revealed that while the growth-enhancing effects of structural change and transformation policy were small yet significant, inflation and regional conflict had a highly significant and strongly negative effect on output. In addition, the legacy of socialism might exacerbate the decline in production in the early stages of transition. The meta-regression analysis that simultaneously controls for various research conditions and the assessment of publication selection bias provides supporting evidence for the results obtained from the meta-synthesis.

Suggested Citation

  • Ichiro Iwasaki & Kazuhiro Kumo, 2019. "J-Curve in Transition Economies: A Large Meta-analysis of the Determinants of Output Changes," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(1), pages 149-191, March.
    • Handle: RePEc:pal:compes:v:61:y:2019:i:1:d:10.1057_s41294-018-0058-4
    DOI: 10.1057/s41294-018-0058-4
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    Cited by:

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    3. Joaquim Oliveira-Martins & Bruno T. Rocha, 2021. "Reform Design Matters: The Role of Structural Policy Complementarities," Springer Books, in: Elodie Douarin & Oleh Havrylyshyn (ed.), The Palgrave Handbook of Comparative Economics, edition 1, chapter 19, pages 493-516, Springer.
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    More about this item

    Keywords

    Output changes; Transition economies; Meta-analysis; Publication selection bias; Central and Eastern Europe; Former Soviet Union;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General
    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform

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