“Big Bang” Versus Gradualism in Economic Reforms: An Intertemporal Analysis with an Application to China

Andrew Feltenstein () and Saleh Nsouli

No 2001/098, IMF Working Papers from International Monetary Fund

Abstract: This paper reviews briefly the controversy in the literature concerning the speed of adjustment and sequencing of reforms, and presents a model parameterized with Chinese data. The model is used to generate different policy simulations to illustrate some of the key issues in the debate on the speed and sequencing of reforms, and not to provide a basis for policy recommendations for China. The simulations highlight the importance of the criteria being used for determining speed and sequencing. The paper also underscores the limitations involved in attempting to derive conclusions from the model, given the complexity of the issues.

Keywords: WP; real GDP; price level; exchange rate; Transition; sequencing of reforms; speed of adjustment; private sector; gradual privatization; expenditure switching; devaluation effect; current account position; inflation rate; maximization problem; privatization simulation; one-step devaluation; savings behavior; Privatization; Current account; Public enterprises; Public sector (search for similar items in EconPapers)
Pages: 40
Date: 2001-08-01
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Citations: View citations in EconPapers (2)

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Journal Article: "Big Bang" Versus Gradualism in Economic Reforms: An Intertemporal Analysis with an Application to China (2003)
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