DOI: https://doi.org/10.36719/2706-6185/59/216-221
Aykhan Alibayli
Azerbaijan State Economic University
Master’s student
https://orcid.org/0009-0002-7391-9723
ayxanaleev00@gmail.com
Consequences of the Collapse of Socialist Economies in
Eastern Europe
Abstract
This article analyzes the economic, social and institutional consequences of the collapse of the socialist economic system in Eastern Europe. As a result of the political transformations that took place in 1989-1991, the countries of the region entered the transition phase from a planned economy to a market economy. The main objective of the study is to examine the effects of this transition on the economic structure, production system, employment level and international economic integration. The article analyzes problems such as production declinem inflation increase and temporary weakening of social welfare that occurred in the first stage of the transiton economies. At the same time, the new economic model that was formed in the long term as a result of privatization processes, institutional reforms and attracting foreign investments is also evaluated. The study shows that although the collapse of the socialist system created economic instability in the short term, it accelerated the integration of many Eastern European countries into the global economic system and the formation of market institutions in the long term.
Keywords: socialist economy, transition economy, Eastern Europe, market economy