ABSTRACT
Focusing on relations between the former Soviet Union and the small East European member countries of the Council for Mutual Economic Assistance (CMEA), the article discusses some antecedents, reasons, and consequences of, as well as perspectives after, the dissolution of the organization. First, the short-term (price-related) and the longer term (dynamic) effects of CMEA economic cooperation are analyzed and explanation is offered why the Soviet Union did not realize sizable benefits from the switch to dollar payments and world market prices in 1991. In discussing different interpretations of the relationship between the collapse of trade and decline in output in Eastern Europe, the authors emphasize the negative effect of the export decline on output levels, but reject the proposition that this was the major factor in inducing the recession. Finally, expectations of different participants regarding prospective economic relations between Eastern Europe and the former Soviet Union are addressed. While the authors stress the constraints to the growth of this trade and warn against illusions regarding its future importance, they do see some scope for an increase from its present depressed level.
