ABSTRACT
The economic transformation of former centrally planned economies has been accompanied by large declines in output, significant changes in relative prices, and, at least initially, rapid increases in inflation and declines in living standards. While much of the decline in living standards is attributable to the economic dislocations resulting from the breakdown of the CMEA trading regime, the breakup of the FSU, and loose national financial policies, a significant part of it has stemmed from reform policies, which, in the short run, have increased the prices of essential commodities and reduced employment opportunities.
