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Reform in Eastern Europe: A General Equilibrium Model with Distortions in Relative Prices and Factor Markets

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  • Debra Moore Patterson

Abstract

This paper presents an analysis of reforms using a simple general equilibrium model with production. The model illustrates some of the distortions remaining in the Eastern European countries as they adopt market-oriented policies and it shows that price reforms should take priority if simultaneous reform is not possible. Specifically, the authors examine reforms of relative prices of output goods and liberalization of the capital market. The model is solved numerically, showing that restrictions on capital mobility should be retained until after price distortions have been removed.

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  • Debra Moore Patterson, 1996. "Reform in Eastern Europe: A General Equilibrium Model with Distortions in Relative Prices and Factor Markets," Canadian Journal of Economics, Canadian Economics Association, vol. 29(2), pages 457-472, May.
    • Handle: RePEc:cje:issued:v:29:y:1996:i:2:p:457-72
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    Cited by:

    1. Debra Patterson, 1999. "An open-economy transition model," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 5(1), pages 24-36, February.
    2. Hans J. Czap & Kanybek D. Nur-tegin, 2011. "Big Bang vs. Gradualism – A Productivity Analysis," EuroEconomica, Danubius University of Galati, issue 29, pages 38-56, August.

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