| Economies
of central and eastern Europe, transition of
The economic transition of eastern and central Europe is a multi-phase process of abandoning communist economic institutions and mechanisms and replacing them with market structures and dynamics. This process takes place on both macro (national economy) and micro (firm) levels. On the macro level, six phases of this process have been identified: the political phase, the early 'marketization' phase, the inflation control phase, the phase of building market institutions, the anti-recession economic policies phase and the growth policy phase. Within this context, the economies of central and eastern Europe are highly diversified; they include institutionally mature economies, economies which are still building institutions, monetarily unstable economies and politically unstable economies. On the micro level, enterprises can be divided into five types: large, low-value-added state-owned enterprises in heavy industries; enterprises producing higher value-added marketable products; small businesses; large private enterprises; and enterprises with foreign capital participation (joint ventures). These different types of enterprise each face different transition problems in different economies. |