J-Curve in Transition Economies: A Large Meta-analysis of the Determinants of Output Changes
Immediately after the collapse of socialism, the countries of Central and Eastern Europe and the former Soviet Union fell into a serious output decline, after which they experienced a gradual recovery. Therefore, without exception, these countries followed a J-curved growth path. However, there were marked differences among them in the length and depth of the output fall and the speed of recovery. In this paper, we perform a comparative meta-analysis of the effect size and statistical significance of structural change, transformation policy, the legacy of socialism, inflation, and regional conflict in order to elucidate the mechanism that generated the J-shaped trajectory in transition economies. The meta-synthesis, which employs 3279 estimates drawn from 123 previous studies, revealed that while the growth-enhancing effects of structural change and transformation policy were small yet significant, inflation and regional conflict had a highly significant and strongly negative effect on output. In addition, the legacy of socialism might exacerbate the decline in production in the early stages of transition. The meta-regression analysis that simultaneously controls for various research conditions and the assessment of publication selection bias provides supporting evidence for the results obtained from the meta-synthesis.
KeywordsOutput changes Transition economies Meta-analysis Publication selection bias Central and Eastern Europe Former Soviet Union
JEL ClassificationE31 O47 O57 P20 P21
This research work was financially supported by grants-in-aid for scientific research from the Ministry of Education and Sciences in Japan (Nos. 23243032, 26245034), the Joint Usage and Research Center of the Institute of Economic Research, Kyoto University (FY2016), and Center for Economic Institutions of the Institute of Economic Research, Hitotsubashi University. We thank Tomáš Havránek, Robert J. Johnston, Martin Paldam, Tom D. Stanley, Manabu Suhara, Paul Wachtel (the editor), two anonymous referees of the journal as well as participants in the study meeting at the Institute of Economic Research, Hitotsubashi University, Kunitachi, May 25, 2016, and the MAER-NET Colloquium at Hendrix College, Conway, September 16, 2016, and the Kyoto International Conference “Frontier of Transition Economics” at the Campus Plaza Kyoto on February 23–25, 2017 for their helpful comments and suggestions. We also would like to thank Eriko Yoshida for her research assistance and Dawn Brandon for her editorial assistance. Last but not least, we also wish to express our deepest respect to the authors of the literature subject to the meta-analysis in this paper. The usual caveats apply.
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