The European Union’s New Member States

The formerly centrally planned economies of Central and Eastern Europe have undergone an extended period of transition towards market economics, beginning with the collapse of the Soviet Bloc in 1989, and leading up to the enlargement of the European Union in May 2004, when eight transition economies joined the European Union. This was followed by a second enlargement in 2007, when Bulgaria and Romania became EU members.

The legacy of central planning and a significant gap in
income levels between most of the New Member States (NMS) and the older EU members poses a set of economic issues that are specific to the NMS and set them apart from the other European Union members. In this special issue of the National Institute Economic Review, five papers that address some of these key issues are published, in order to draw policy conclusions that may speed the process of convergence
towards income levels in the rest of the EU, while
minimising the short-term disruption to the economies of
the NMS.

The articles are:

Balázs Égert
Prices and Price Convergence in Emerging Europe: an Overview

Martin Falk
Effects of Foreign Ownership On Innovation Activities: Empirical Evidence for Twelve European Countries

Jan Babecky, Ales Bulir, and Katerina Smidkova
Sustainable exchange rates when trade winds are plentiful

Jan Babecky, Ales Bulír, and Katerina smídkova
Sustainable Exchange Rates When Trade Winds Are Plentiful
J. David Brown and John S. Earle
Creating Productive Jobs in East European Transition Economies: a Synthesis of Firm-Level Studies

Jan Babecky and Kamil Dybczak
Real wage flexibility in the enlarged EU: evidence from a structural VAR