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Abstract: The transition of several East and Central European countries and thecountries of the Former Soviet Union from the socialist economic system to thecapitalist one is studied. A recently developed microeconomic model for thepersonal income distribution and its evolution and a simple functionalrelationship between the rate of the per capita GDP growth and the attainedlevel of the per capita GDP are used to describe the transition process. Thedeveloped transition model contains only three defining parameters anddescribes the process of real GDP per capita evolution during the last 15years. It is found that the transition process finished in the Central Europeancountries several years ago and their economic evolution is defined by purecapitalist rules. In the long run, this means that the future of thesecountries has to follow the same path, i.e. dependence on the per capita GDPgrowth rate of the per capita GDP itself, as the developed countries have hadin the past. If the best GDP evolution scenario occurs for the studiedcountries, they will be able to maintain the absolute lag in per capita GDPrelative to most developed countries including the USA. But they will nevercatch the advanced countries if they follow the same rules of development. InRussia and some countries of the Former Soviet Union the transition process isstill far from complete.



Author: Ivan O. Kitov

Source: https://arxiv.org/



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