How Tight is Too Tight? A Look at Welfare Implications of Distortionary Policies in Uzbekistan

Edward R. Gemayel and David Grigorian

European Journal of Comparative Economics, 2006, vol. 3, issue 2, 239-261

Abstract: Since independence in 1991, Uzbekistan has pursued a gradual approach to the transition from planned to market economy. This approach relied heavily on trade controls, directed credit, and large public investments. In addition, a number of financial sector measures were instituted that distorted resource allocation and increased transaction costs. As a result, while possibly preventing the contraction of output in the early 1990s, these policies led to disappointing economic outcomes and social conditions later on. The paper reviews the underlying distortions and presents survey-based evidence to support their existence and their detrimental impact on economic activity. Looking forward, the paper - using a representative agent framework to model existing financial sector distortions - offers some guidance regarding the likely implications of eliminating these distortions on key aggregate variables. It suggests that the elimination of these distortions will be welfare enhancing and will lead to higher levels of investment and capital stock.

Keywords: financial sector distortions; transition; Uzbekistan (search for similar items in EconPapers)
JEL-codes: E50 P23 P27 (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ejce.liuc.it/18242979200602/182429792006030204.pdf (application/pdf)

Related works:
Working Paper: How Tight Is Too Tight? A Look at Welfare Implications of Distortionary Policies in Uzbekistan (2005)
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: https://EconPapers.repec.org/RePEc:liu:liucej:v:3:y:2006:i:2:p:239-261

Access Statistics for this article

European Journal of Comparative Economics is currently edited by Matteo Migheli, Giovanni Ramello, Koji Domon, Peter Grajzl, David M. Kemme, Marcello Signorelli and Richard Watt

More articles in European Journal of Comparative Economics from Cattaneo University (LIUC) Contact information at EDIRC.
Bibliographic data for series maintained by Laura Ballestra ().