A Monetary Model of a Shortage Economy
AbstractDuring the transition from centrally planned economies to market economies, many countries have experienced macroeconomic instability. This paper develops a monetary model to show how macroeconomic stability and instability can materialize in a rigidly planned economy with inherent structural imbalances and an irrational price system. The study shows that, without hardening enterprise budget constraints, wage and price liberalization may destabilize an economy and lead to persistent budget deficits and inflation. The paper also analyzes household savings and money demand in a shortage economy, clarifying the somewhat confusing concept of "monetary overhang" in the literature.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Staff Papers - International Monetary Fund.
Volume (Year): 40 (1993)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://www.palgrave-journals.com/
Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
Find related papers by JEL classification:
- D59 - Microeconomics - - General Equilibrium and Disequilibrium - - - Other
- P22 - Economic Systems - - Socialist Systems and Transition Economies - - - Prices
- P23 - Economic Systems - - Socialist Systems and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Filippov, Mikhail G, 2002. " Russian Voting and the Initial Economic Shock of Hyperinflation," Public Choice, Springer, Springer, vol. 111(1-2), pages 73-104, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elizabeth Gale).
If references are entirely missing, you can add them using this form.