Chapter 6: Remarks on globalization, opennes and macroeconomic stability in transition economies
6. Remarks on globalization, openness and macroeconomic stability in transition economies David Lipton Globalization brings benefits and imposes disciplines on all countries with open economies, not least the transition economies (TEs). Ten years after Poland’s historic leap to a market economy, Poland is experiencing both the benefits and rigours of globalization. I first visited Poland ten years ago, with my colleague Jeff Sachs, to talk about economic reform with Solidarity economists and strategists. Arriving the day after Solidarity’s breathtaking electoral victory in June 1989, I recall two conflicting impressions. First, the sense of awesome possibility posed by a country galvanized to remake itself and join Europe. And second – something that at times is hard to recall in the light of what has since occurred – the vast distance Poland would have to travel to achieve its goals. Another impression I recall from my first visit was the economic isolation of Poland. To telephone home required booking a call for eight hours later, or an hour later if you paid double. There were no foreign newspapers or magazines. The drab goods in the stores were not Western goods. I learned later that the Western businesses most interested in Poland were commercial banks, but they were interested in order to divine whether Poland was going to default on the syndicated loans that had been incurred to prop up the ailing communist economy. What a difference a decade makes. Now, Poland is so much a part of the world economy that its policy makers...
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