Macroeconomic Equilibrium and Reform in a Transitional Economy

Huw Dixon

No 758, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We build a general equilibrium macroeconomic model of a transitional economy to reflect five stylized facts. Among these are that central planning has left a legacy of highly concentrated industry and a residue of price controls and rationing. An `almost Classical' dichotomy obtains in the model: monetary expansion leaves output and unemployment unchanged (despite the existence of unemployment), though leisure time declines. The economy displays a high degree of complementarity between the state-controlled sector and the private sector, however, giving rise to multiplier effects. We analyse the effects of price liberalization and privatization in this framework.

Keywords: Imperfect Competition; Macroeconomics; Transitional Economy (search for similar items in EconPapers)
JEL-codes: D43 E10 P21 P51 (search for similar items in EconPapers)
Date: 1993-01
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Journal Article: Macroeconomic equilibrium and reform in a transitional economy (1995)
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