Most countries in Eastern Europe and the Baltics recorded healthy output growth in 1995 following a precipitous contraction during the early 1990s. Inflation in these countries has fallen sharply during the past two years. A sharp deceleration in the pace of price increases has also been recorded in many countries of the former Soviet Union, although the level of inflation in most of these countries remains substantial and, more importantly, output is still declining.

The emerging picture is one of renewed growth in countries that showed early determination to implement market-oriented reforms and stabilize their macro-economy, and of gradual and slow stabilization of output in those countries that entered the process only recently.

The essays collected in this book study in detail both the analytical underpinning of this process - the overall relationships between stabilization, reforms, and growth - as well as the specific stabilization experience in a number of Eastern European and former Soviet Union countries. In addition, the volume discusses some of the central policy issues related to enterprise behavior in postsocialist countries and looks at the longer-run dimensions of a successful transition.