The large and widening gap between economic performance in Eastern European transition economies and those of the former Soviet Union has been dubbed "the Great Divide" by Berglof and Bolton (2002). This paper provides a rationale for the gap based upon the concept of financial repression. The...

Despite its adoption of a nominal-anchor exchange-rate policy during the period 1999-2005, Ukrainian financial markets were subject to substantial premia in interest rates on interbank markets relative to what is observed in Euro credit markets. In this paper I demonstrate that there were three...