Price Liberalization in a Reforming Socialist Economy : A Search Equilibrium Approach

Author/Editor:

Domenico Fanizza

Publication Date:

June 1, 1992

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

A bilateral search model of the commodity market is formulated to study the effects of liberalizing prices in a reforming socialist economy. The main result is that if the competitive structure of the economy is not quickly modified to eliminate supply rents, price liberalization may be accompanied by substantial output losses. A role for tax policy in limiting output losses is identified.

Series:

Working Paper No. 92/44

Subject:

English

Publication Date:

June 1, 1992

ISBN/ISSN:

9781451846379/1018-5941

Stock No:

WPIEA0441992

Format:

Paper

Pages:

30

Please address any questions about this title to publications@imf.org