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Liberalization and the Behavior of Output During the Transition From Plan to Market

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...

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Bibliographic Details
Main Author: Hernández-Catá, Ernesto
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 1997
Series:IMF Working Papers
Subjects:
Inflation
Wealth
Socialist Systems And Transitional Economies: Performance And Prospects
Economics
Saving
Deflation
Production
Comparative Studies Of Particular Economies
National Accounts
Socialist Systems And Transitional Economies: Planning, Coordination, And Reform
Macroeconomics: Production
Price Level
Consumption
Prices
Macroeconomics
Macroeconomics: Consumption
Economic Theory
Production Growth
Russian Federation
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
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
Physical Description:29 pages
ISBN:9781451969979

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