chapter  2
20 Pages

SAM Multipliers for West and East European Countries: an Evaluation of Transitional Patterns

The economies of Eastern Europe (EE), under communist rule for more than four decades, have developed specific traits which are in variance with structural patterns of economic development. Communist priorities are known to have favoured investment in heavy industries over final consumption, the so-called productive sectors over services, large scale firms over small ones, state owned over private firms, etc. Besides, the height and distribution of remuneration as well as the size and pattern of consumption were superficially maintained at levels imposed by state authorities without due consideration of agent responses. Now that these economies are turning back to normal market conditions, there is a need for more insight into the gap between the imposed and normal structural patterns.