On the Transition from a Supply to a Demand-Constrained Economic System: the East European Experience.

The structure of this paper is as follows: Scetion I is the an introduction. Section II provides an analysis of the initial condition of the former CPEs on the brink of transformation, and suggests why standard macroeconomic stabilisation policies may not be appropriate. section III records and explains the output declines, and attempts to ascertain the role of effective demand as a contributory cause. Section IV suggests an alternative set of policies that incorporates effective demand during the transition process. Finally, section V summarises the key points of the paper and offers some concluding remarks.