ABSTRACT
This chapter analyses the issues facing five Central and East European countries (CEEC)—Bulgaria, the former Czech and Slovak Federal Republic, Hungary, Poland, and Romania, as they proceed with transitions to market economies. It deals with permission from the Organization for Economic Co-operation and Development (OECD) from Reforming the Economies of Central and Eastern Europe, Paris, France: OECD, 1992. If the CEECs are to maintain stable economic conditions, each must create an institutional framework for maintaining macroeconomic control. Many structural features of the CEECs' economies reflected the emphasis placed by central planning on rapid capital accumulation and extensive development rather than on labor efficiency in industry. Central planning institutions were designed to carry out, on an administrative basis, most of the functions performed by markets in OECD economies. Macroeconomic policy must ensure financial conditions conducive to reasonably low inflation in order to provide a stable environment for the reform process.
