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East Germany’s process of systemic transformation was analysed against a theoretical framework which focused on the economic mech- anisms identifiable in the two respective systems of the planned and monetary economy. The analysis closed with an assessment of the influence of this particular path of shock therapy on the conditions of sustainable catch-up development in the region. The study of the East German case proved to be particularly useful for this research, in as much as the instant and complete systemic shift of economic and monetary integration provided a clear picture of how an economic structure, which emerged under the old planned system, would perform in the successor system. The systemic analysis was not complicated by earlier structural, institutional or constitutional convergence: a pure form of a socialist planned economy had to instantaneously face the conditions of a competitive monetary system. The deductive method allowed the analysis to generalise the relevance of the lessons which can be drawn from this particular case for all PSEs during the 1990s in general and for the Hungarian case in particular.
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