ABSTRACT
The opening of formerly planned economies to world markets and the implementation of market-oriented reforms have profound economic, social, and political consequences for those countries in Central and Eastern Europe and the Commonwealth of Independent States. But there are also substantial effects on the economies of Western Europe resulting from enhanced price competition in product markets, migration, and capital flows. The macroeconomic effects of opening up Eastern Europe and the adjustment requirements they impose on the Organization for Economic Cooperation and Development countries are fundamentally determined by the feasible growth options facing the reform countries. The export-led growth option, of encouraging exports from Central and Eastern Europe to the West, dominates the alternative of transferring capital to the East by means of import-led growth in most respects. The adjustment burden resulting from reforms in Central and Eastern Europe is usually viewed in negative terms; the West has no alternative but to support economic growth in Central and Eastern Europe.
