Achieving Rapid Growth in the Transition Economies of Central Europe

Key Facts and Insights

1. Defining Transition Economies: The authors posit that transition economies are those that are shifting from a centrally planned system to a market-oriented one. This includes many countries in Central and Eastern Europe post the collapse of the Soviet Union.
2. Economic Shock Therapy: Sachs and Warner advocate for a rapid transformation approach, known as 'shock therapy,' which involves immediate liberalization of prices, rapid privatization, and the swift introduction of a convertible currency.
3. Role of External Aid: The book highlights the crucial role external aid plays in achieving rapid growth in transition economies, especially in the initial...

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