ABSTRACT
During 1989-1990, several of the nations that used to be called "socialist" or centrally planned economies have made a fundamental commitment to transform their traditional or reformed but still centrally directed economic systems into market economies. Economic liberalization is defined broadly, as reducing the role of government in microeconomic decisions, increasing reliance on the price mechanism rather than controls, and increased integration into the world economy. The problems of economic liberalization in Central and East Europe are in certain respects similar, but in important respects quite different from those of the non-socialist countries, whether more or less developed. The countries of Central and Eastern Europe wish to create a well-functioning market economy. An essential precondition for it is liberalizing their foreign economic relations. There is a consensus that macroeconomic stability is a necessary but not sufficient condition of sustainable improvements in economic performance.
