Macroeconomic Comparison of Transformation Processes in Central and East European Countries

Abstract

The aim of the paper is to examine and compare macroeconomic aspects of 10-year-transition period in four Central European countries: Czech Republic, Slovak Republic, Hungary and Poland. Economic effects observed in the CEECs have been connected very strong with two processes: transformation into market economies and their involvement into economic integration with the EU. One ofthe major impediments to a rapid accession is the large gap between the EU and the central European candidate countries in terms of: the level of economic development and monetary stability, the structure ofthe economy, the competitiveness of companies, differences the legal system, - the efficiency of market institutions. This paper explores comparative aspects of macroeconomic adjustments of these countries into market economies and answers the question whether foreign direct investment (FDI) can contribute to competitiveness and to narrowing the development gap between the CECs, and the EU members. The indices of the macroeconomic stability, structural changes and economic effects of FDI inflow are analyzed in details. The signing of the Europe Agreements and the prospect of the membership of the EU enhanced the location advantages of all these countries. They are attractive both for European and non-European finns as a location for their investment. Integration processes initiated by Europe Agreement and adjustments to a future membership of the EU give an impulse both for optimum seeking and tariff jumping investment in these countries.