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Money, Financial Instability and Stabilization Policy

Edited by L. Randall Wray

Money, Financial Instability and Stabilization Policy consists of original articles by leading Post Keynesians, Kaleckians and other heterodox economists from the developed and developing world. Post Keynesian literature has long been associated with the study of money, financial markets and financial instability. Indeed, this is perhaps the area to which Post Keynesians have made the greatest contributions. The authors to this volume present an overview of the latest research on monetary theory and policy, financial markets, and financial instability coming out of the Post Keynesian school of thought. They provide an indication of the wide-ranging interests and of the truly international scope of Post Keynesian research. The first half of the volume is theoretical, while the second half includes papers that are either empirical or more focused on specific concerns.
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Chapter 12: The Evolution of Financial Systems: The Development of the New Member States of the European Union

Elisabeth Springler


Elisabeth Springler Introduction Since 1 May 2004 the European Union has ten new member states, a circumstance which has been heavily discussed even before the enlargement.1 The macroeconomic as well as the structural and institutional situation of the accession countries had to be examined. The focus of attention in this chapter is on the eight transformation countries, which had to go through a substantial restructuring and developing process in the previous decade to be able to join the European Union. These eight transition countries (Estonia, Czech Republic, Hungary, Latvia, Lithuania, Slovenia, Poland and Slovakia) performed well in macroeconomic terms. In 2002, growth rates reached between 1.4 per cent in Poland and 6.1 per cent in Latvia after a decade of high volatility. At the same time inflation decreased remarkably, reaching between 7.5 per cent in Slovenia and 0.3 per cent in Lithuania in 2002, compared to 32.3 per cent in Slovenia respectively 410.2 per cent in Lithuania in 1993. Unemployment showed a slight increase in the last decade and in 2002 varied between 5.8 per cent in Hungary, which, exceptionally, saw a decrease in unemployment, from 11.9 per cent in 1993, and Poland, with 18.1 per cent, which represents an increase of 1.7 percentage points compared to 1993 (OeNB, 1/2003). These data show that differences in performance are observable despite the fact that the accession countries follow the same trend. Countries with a closer geographical and, in many cases, also historical relationship with Central Europe developed more quickly in the...

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