Liberalization and the Behavior of Output During the Transition From Plan to Market
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Summary:
This paper deals with liberalization and the evolution of output during the transition from plan to market. It explains why strong liberalization leads to a comparatively steep fall in output early in the transition, but a relatively strong recovery later on. Because it takes time to restructure the capital stock inherited from the old system, liberalization initially leads to transitional unemployment of capital and the contraction of the old enterprise sector. By making room quickly for the new, more efficient enterprises, however, liberalization also sets the stage for recovery and a much higher level of income in the medium term.
Series:
Working Paper No. 1997/053
Subject:
Consumption Inflation National accounts Prices Production Production growth
Notes:
Also published in Staff Papers, Vol. 44, No. 4, December 1997.
English
Publication Date:
April 1, 1997
ISBN/ISSN:
9781451969979/1018-5941
Stock No:
WPIEA0531997
Pages:
29
Please address any questions about this title to publications@imf.org