chapter  2
39 Pages

Transformational recovery and the impact of the new private sector

ByJAN WINIECKI

Transformational recession differs in its character from cyclical recession. Unsurprisingly, transformational recovery also differs from cyclical recovery. In transformational recession a very large fall of output results primarily from the changed structure of incentives during the systemic change that once for all eliminated demand for “pure socialist production.” In transformational recovery we register, as in cyclical recovery, output increase, but by contrast there is a simultaneous major change on the supply side. For it is new (overwhelmingly private) firms that increasingly supply the market.