Between 1955 and 1987, Austrian trade with Eastern Europe was characterised by specific factors. On the one hand, trade flows
were influenced by the central planning system in Eastern Europe. On the other hand, Austria applied non-standard policy tools
to manage Eastern trade. Furthermore, Austrian trade with Eastern Europe was affected by the implementation of the free trade
agreement with the European Communities and the change in the institutional framework for Eastern trade in the early 1970s.
Austrian Eastern exports were fostered by increased export subsidies and barter trade. We assess the net effects of these
contradictory measures of trade policy by estimating aggregate import and export equations and testing for a structural break
in 1973. Our results are consistent with the view that Austria subsidised Eastern exports to pursue a countercyclical policy