Russia and many other transition countries are now facing the challenges of opening up, restructuring, and modernizing their economies, which requires addressing numerous institutional weaknesses and supply-side distortions. The papers in this collection examine these issues both in Russia and from a regional perspective, drawing on the experience of other reforming countries. Aspects addressed include the implications of trade and capital flows, the process of labor market reform, financial market development, productivity growth, and innovation dynamics. The dynamics of the reform process are also studied in the context of new political economy models.

The focus of this book is on economic and institutional modernization in the new Russia and Eastern Europe. Systemic transformation and economic catching-up process raise new theoretical and empirical issues as well as policy topics. In the book economists from Europe and the US look into trade and investment dynamics and policy shifts, including monetary policy and strategies for international organizations. Special emphasis is on the role of the natural resources sector and on economic growth. Moreover, the internationalization of regions within Russia and energy issues as well as aspects of trade gravity modelling are analyzed. The book highlights the wider European integration dynamics from a comparative perspective.

Edward M. Graham, Nina Oding and Paul J. J. Welfens Eastern Europe and the former Soviet Union have achieved sustained economic growth in first half of the new decade in the 2V^ century. EU ac­ cession countries which have joined the EU have benefited mainly from high capital inflows, a reduced risk premium - with shadow effects of this already occurring in the years before explicit membership - and growing trade. While system transformation has undermined trade between Eastern Europe and Russia for several years there are medium prospects for grow­ ing trade in the whole of Europe. Russia''s case, however, is different from the EU accession countries as a major driving force of economic dynamics is the oil and gas sector which has considerable backward and forward linkages. At the same time this sector apparently is politically quite sensi­ tive. The Transatlantic Transformation and Economic Development Re­ search Group has organized several workshops within a major interna­ tional research project. The project is devoted to analyzing the internatio­ nalization of the Russian economy and the associated changes in major policy fields. This book contains the revised analytical papers from the St. Petersburg conference in 2003 when the city celebrated its 300 year anniversary. We are very grateful to the Leontief Center for excellent organization of the conference. The paper by Paul J. J.

Edward M. Graham, Nina Oding and Paul J. J. Welfens Eastern Europe and the former Soviet Union have achieved sustained economic growth in first half of the new decade in the 2V^ century. EU ac­ cession countries which have joined the EU have benefited mainly from high capital inflows, a reduced risk premium - with shadow effects of this already occurring in the years before explicit membership - and growing trade. While system transformation has undermined trade between Eastern Europe and Russia for several years there are medium prospects for grow­ ing trade in the whole of Europe. Russia's case, however, is different from the EU accession countries as a major driving force of economic dynamics is the oil and gas sector which has considerable backward and forward linkages. At the same time this sector apparently is politically quite sensi­ tive. The Transatlantic Transformation and Economic Development Re­ search Group has organized several workshops within a major interna­ tional research project. The project is devoted to analyzing the internatio­ nalization of the Russian economy and the associated changes in major policy fields. This book contains the revised analytical papers from the St. Petersburg conference in 2003 when the city celebrated its 300 year anniversary. We are very grateful to the Leontief Center for excellent organization of the conference. The paper by Paul J. J.

Russia and many other transition countries are now facing the challenges of opening up, restructuring, and modernizing their economies, which requires addressing numerous institutional weaknesses and supply-side distortions. The papers in this collection examine these issues both in Russia and from a regional perspective, drawing on the experience of other reforming countries. Aspects addressed include the implications of trade and capital flows, the process of labor market reform, financial market development, productivity growth, and innovation dynamics. The dynamics of the reform process are also studied in the context of new political economy models.

The focus of this book is on economic and institutional modernization in the new Russia and Eastern Europe. Systemic transformation and economic catching-up process raise new theoretical and empirical issues as well as policy topics. In the book economists from Europe and the US look into trade and investment dynamics and policy shifts, including monetary policy and strategies for international organizations. Special emphasis is on the role of the natural resources sector and on economic growth. Moreover, the internationalization of regions within Russia and energy issues as well as aspects of trade gravity modelling are analyzed. The book highlights the wider European integration dynamics from a comparative perspective.

Edward M. Graham, Nina Oding and Paul J. J. Welfens Eastern Europe and the former Soviet Union have achieved sustained economic growth in first half of the new decade in the 2V^ century. EU ac­ cession countries which have joined the EU have benefited mainly from high capital inflows, a reduced risk premium - with shadow effects of this already occurring in the years before explicit membership - and growing trade. While system transformation has undermined trade between Eastern Europe and Russia for several years there are medium prospects for grow­ ing trade in the whole of Europe. Russia''s case, however, is different from the EU accession countries as a major driving force of economic dynamics is the oil and gas sector which has considerable backward and forward linkages. At the same time this sector apparently is politically quite sensi­ tive. The Transatlantic Transformation and Economic Development Re­ search Group has organized several workshops within a major interna­ tional research project. The project is devoted to analyzing the internatio­ nalization of the Russian economy and the associated changes in major policy fields. This book contains the revised analytical papers from the St. Petersburg conference in 2003 when the city celebrated its 300 year anniversary. We are very grateful to the Leontief Center for excellent organization of the conference. The paper by Paul J. J.

Edward M. Graham, Nina Oding and Paul J. J. Welfens Eastern Europe and the former Soviet Union have achieved sustained economic growth in first half of the new decade in the 2V^ century. EU ac­ cession countries which have joined the EU have benefited mainly from high capital inflows, a reduced risk premium - with shadow effects of this already occurring in the years before explicit membership - and growing trade. While system transformation has undermined trade between Eastern Europe and Russia for several years there are medium prospects for grow­ ing trade in the whole of Europe. Russia's case, however, is different from the EU accession countries as a major driving force of economic dynamics is the oil and gas sector which has considerable backward and forward linkages. At the same time this sector apparently is politically quite sensi­ tive. The Transatlantic Transformation and Economic Development Re­ search Group has organized several workshops within a major interna­ tional research project. The project is devoted to analyzing the internatio­ nalization of the Russian economy and the associated changes in major policy fields. This book contains the revised analytical papers from the St. Petersburg conference in 2003 when the city celebrated its 300 year anniversary. We are very grateful to the Leontief Center for excellent organization of the conference. The paper by Paul J. J.