Changing Economic Mechanisms: A Model of the Transition from Budget Regulation to the Competitive Market

Vadim Arkin and Alexander Slastnikov ()

Economic Theory, 1996, vol. 7, issue 2, pages 307-21

Abstract: In the framework of dynamic equilibrium theory we propose a model of gradual transition from an Economy with centralized budgets regulation to a Market Economy (with self-financing). It is assumed that information about possible change of the economic mechanism affects essentially the behavior of agents. The duration of the transition period is regarded as a random variable. We study conditions when such a transition allows firms to adapt their plans to future markets and guarantees the existence of equilibrium paths. We also discuss the case of Shock Therapy (instantaneous transition) which may cause bankruptcy, jumps in prices and deficits.

Date: 1996
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Changing economic mechanisms: A model of the transition from budget regulation to the competitive market (*) (1996)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:spr:joecth:v:7:y:1996:i:2:p:307-21

Ordering information: This journal article can be ordered from
http://link.springer.de/orders.htm

Access Statistics for this article

Economic Theory is edited by Nichoals Yanneils

More articles in Economic Theory from Springer
Series data maintained by Guenther Eichhorn ().