ABSTRACT
The late XX Century witnessed the end of the Soviet Union and its economic model. This marked a tumultuous period for the Central and Eastern Europe countries as they transitioned from centrally planned economies to capitalism. The region grappled with declining output, rising inflation, increased inequality, and heightened poverty. However, economic growth rebounded from the mid-1990s to the early 2000s as these nations adapted to capitalism. The integration of Central and Eastern European economies into the capitalist world resulted in two distinct paths. The first group, comprising countries that joined the European Union, experienced faster growth and successful catching up. In contrast, the second group faced slower economic growth, causing them to fall behind. The restarting of capitalism resulted in unequal development. This chapter studies the catching up and falling behind of Central and Eastern European nations from 1970 to 2019, organized in four sections. The first section provides a brief overview of the economic history, including the transition to capitalism in the 1990s. The second section explores the relationship between technical change during and after this transition. The third section delves into capital accumulation trends across the region, and the fourth section concludes with insights into the future of the region.
