From Centrally Planned to Market Economy: The Road from CPE to PCPE

Guillermo Calvo and Jacob A. Frenkel
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Jacob A. Frenkel: International Monetary Fund

IMF Staff Papers, 1991, vol. 38, issue 2, 268-299

Abstract: The early stages of transformation of centrally planned economies into market economies are examined. In the transitional phase when an economy is no longer centrally planned, but not yet market based--when it is a "previously centrally planned economy"--expectations play a key role. A model is developed to analyze the consequences of expected price liberalization, and the benefits from early development of financial markets and speedy implementation of price reform are demonstrated. Ways to reduce liquidity overhang are examined, the consequences of privatization are analyzed, and the benefits of an effective tax system are highlighted.

JEL-codes: F30 G20 P21 (search for similar items in EconPapers)
Date: 1991
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