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The Determinants of the Economic Crisis in Post-Socialist Europe

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  • Richard Connolly

Abstract

After enjoying a period of sustained economic growth that saw the region converge with EU per capita income levels, the global economic crisis caused post-socialist Europe to suffer a larger decline in output during 2008–2009 than any other region in the world. While there was considerable variation in individual countries' experience of the crisis, this article argues that the severity of the crisis can be explained by three key macro-financial variables. The analysis suggests that alternative explanations focusing on other macroeconomic vulnerabilities, institutional weaknesses or trade vulnerabilities are of little explanatory utility.

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  • Richard Connolly, 2012. "The Determinants of the Economic Crisis in Post-Socialist Europe," Europe-Asia Studies, Taylor & Francis Journals, vol. 64(1), pages 35-67.
    • Handle: RePEc:taf:ceasxx:v:64:y:2012:i:1:p:35-67
    DOI: 10.1080/09668136.2012.635474
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    References listed on IDEAS

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    1. Carmen M. Reinhart & Vincent Raymond Reinhart, 2002. "What Hurts Emerging Markets Most? G3 Exchange Rate or Interest Rate Volatility?," NBER Chapters, in: Preventing Currency Crises in Emerging Markets, pages 133-170, National Bureau of Economic Research, Inc.
    2. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    3. repec:zbw:bofitp:2009_024 is not listed on IDEAS
    4. Roubini, Nouriel & Brad Setser, 2004. "Bailouts or Bail-ins? Responding to Financial Crises in Emerging Economies," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 378, April.
    5. Vachudova, Milada Anna, 2005. "Europe Undivided: Democracy, Leverage, and Integration After Communism," OUP Catalogue, Oxford University Press, number 9780199241194.
    6. Sanjaya Lall, 2000. "The Technological Structure and Performance of Developing Country Manufactured Exports, 1985-98," Oxford Development Studies, Taylor & Francis Journals, vol. 28(3), pages 337-369.
    7. Andrei Vernikov, 2010. "Russian banking: a comeback of the state," UCL SSEES Economics and Business working paper series 104, UCL School of Slavonic and East European Studies (SSEES).
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    Cited by:

    1. Zsótér Brigitta & Illés Sándor & Simonyi Péter, 2020. "Model of Local Economic Development in Hungarian Countryside," European Countryside, Sciendo, vol. 12(1), pages 85-98, March.
    2. Anna Shostya, 2019. "The Global Financial Crisis in Transition Economies: The Role of Initial Conditions," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 47(1), pages 37-51, March.
    3. Richard Connolly, 2013. "Developments in the Economies of Member States Outside the Eurozone," Journal of Common Market Studies, Wiley Blackwell, vol. 51, pages 201-218, September.
    4. Tim Haughton, 2014. "JCMS Special Issue 2014: Eastern Enlargement Ten Years On: Transcending the East-West Divide? Guest Editors: Rachel A. Epstein and Wade Jacoby," Journal of Common Market Studies, Wiley Blackwell, vol. 52(1), pages 71-87, January.
    5. Andres Kuusk & Karsten Staehr & Uku Varblane, 2017. "Sectoral change and labour productivity growth during boom, bust and recovery in Central and Eastern Europe," Economic Change and Restructuring, Springer, vol. 50(1), pages 21-43, February.
    6. Richard Connolly & Christopher A. Hartwell, 2014. "Developments in the Economies of Member States Outside the Eurozone," Journal of Common Market Studies, Wiley Blackwell, vol. 52, pages 202-218, November.
    7. Keller Judit & Kovács Katalin & Rácz Katalin & Swain Nigel & Váradi Monika, 2016. "Workfare Schemes as a Tool For Preventing the Further Impoverishment of the Rural Poor," Eastern European Countryside, Sciendo, vol. 22(1), pages 5-26, December.

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