This paper applies the methodology and the empirical results derived from the `endogenous growth literature' to the East European countries. From that baseline, we analyse the solvency of Eastern Europe by calculating a `growth-adjusted-debt-per-effective-capita' measure of the burden of debt in...

Throughout Central and Eastern Europe (CEE), there is a widespread failure of enterprise debtors to make scheduled payments of principal and interest to creditors, who in turn have strong incentives not to declare bankruptcy. In such circumstances, the price mechanism does not properly guide the...