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

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.

Subject: Consumption

Keywords: constant returns to scale, lump sum, market economy, price liberalization, WP

Pages:
30
Volume:
1992
DOI:
https://doi.org/10.5089/9781451846379.001
Issue:
044
Series:
Working Paper No. 1992/044
Stock No:
WPIEA0441992
ISBN:
9781451846379
ISSN:
1018-5941

IMF’s Work

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

Loading component...

IMF Working Papers