Industrial Growth Rates and Instability: An Historical Analysis of the Former Centrally Planned Economies of Eastern Europe

Journal Title: Eurasian Journal of Business and Economics - Year 2011, Vol 4, Issue 8

Abstract

One of the central tenets of socialism and central planning economics, as practiced by the East European countries, was that this organization of employment, production and activity could achieve higher growth rates than market economies. This paper presents an historical analysis of economic performance of seven countries: Bulgaria, Czechoslovakia, GDR, Hungary, Poland, Romania and Yugoslavia during the crucial period of socialism (1960-80). It studies the relationship between industry output growth rates and output instabilities in approximately twenty-five industries. Using empirically estimated models it was found that the instability (volatility) of industry output increased with growth rates and at an increasing rate. Since instability creates substantial costs, these findings imply that the true value of income and product streams in East European countries, after discounting for instability, was lower than otherwise believed. A decomposition of instability into two sources, systemic structure versus operational implementation is suggested.

Authors and Affiliations

Evan E. ANDERSON

Keywords

Related Articles

Determinants of Mergers and Acquisitions in Indian Pharmaceutical Industry

M&A turned out to be significant form of corporate restructuring in post globalization period in Indian industries. The phenomenon is considered to be the most important strategy for gaining competitive advantage for fir...

Customer's Advisory, Organizational Openness and Capability: the Locus of Value Creation

Organizations of today are aware of the necessity to communicate with customers beyond learning about their satisfaction, loyalty or complaints. The closest way is focusing on customer involvement, a general term used fo...

Negative Marketing in Political Campaigns and Its Effect on the Voting Decision of the Indian Millennial

In an unprecedented event, the current ruling party of India – the BJP - won the UP election in 2017 after 15 years of domination by the Congress. In 2016, when all the pollsters and pundits statistically analyzed the on...

An Important Antecedent of Ethical / Unethical Behavior: Religiosity

In This study, we aimed to explore the relationship between religiosity and business ethics. Two dimensions of religiosity – intrinsic and extrinsic- were studied. We have tested two hypotheses related to the relationshi...

Firm Specific and Macroeconomic Determinants of Capital Structure: Evidence from Fragile Five Countries

This study is based on the non-financial companies within the fragile five countries (Turkey, Brazil, South Africa, India and Indonesia) during the period of 2004-2013. The factors affecting capital structure were assess...

Download PDF file
  • EP ID EP441490
  • DOI -
  • Views 64
  • Downloads 0

How To Cite

Evan E. ANDERSON (2011). Industrial Growth Rates and Instability: An Historical Analysis of the Former Centrally Planned Economies of Eastern Europe. Eurasian Journal of Business and Economics, 4(8), 51-70. https://europub.co.uk/articles/-A-441490