Growth and Crisis in Transition: a Comparative Perspective

The paper provides an empirical analysis of the growth performance of transition countries in a comparative perspective, separating episodes of crises from those of growth. Performance is measured by the output response following recessions, by the capacity to rebound, as well as the depth and length of the crisis rather than average rates of growth that aggregate periods of recessions and periods of growth. Results highlight that the post-recession performance in Central and Eastern Europe resembles that of emerging and developing countries in the aftermath of banking and financial crises, often following significant liberalizations. In contrast, the post-crisis performance of CIS countries resembles the output response observed during episodes of civil wars, and remains significantly different from the normal response of an average market country. Moreover, performance depends on economic reforms and especially on the complementarities among different reforms.