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Problems of Transition from a Planned to a Market Economy

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  • Wilhelm Krelle
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    Abstract

    The paper shows that a transition from a planned to a market economy implies an important change of the structure of production, i. e. a reallocation of resources which takes time and induces sufferings for some people. These sufferings may be reduced by subsidization of some sectors, with some negative effects on GDP and growth if subsidization exceeds a certain size. The time tillthe economy in transition reaches an ``old" market economy (asymptotically or totally) is estimated by different methods. Finally other problems, mostly non--economic ones, which are connected with the transition process are discussed.

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    File URL: http://www.wiwi.uni-bonn.de/bgsepapers/bonedp/bgse4_2000.pdf
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    Bibliographic Info

    Paper provided by University of Bonn, Germany in its series Bonn Econ Discussion Papers with number bgse4_2000.

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    Date of creation: Apr 2000
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    Handle: RePEc:bon:bonedp:bgse4_2000

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    Postal: Bonn Graduate School of Economics, University of Bonn, Adenauerallee 24 - 26, 53113 Bonn, Germany
    Fax: +49 228 73 6884
    Web page: http://www.bgse.uni-bonn.de

    Related research

    Keywords: transition; planned economy; market economy;

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    1. Schmidt, Klaus M., 1996. "Incomplete contracts and privatization," European Economic Review, Elsevier, vol. 40(3-5), pages 569-579, April.
    2. Andrei Shleifer, 1998. "State Versus Private Ownership," NBER Working Papers 6665, National Bureau of Economic Research, Inc.
    3. De Fraja, Giovanni, 1993. "Productive efficiency in public and private firms," Journal of Public Economics, Elsevier, vol. 50(1), pages 15-30, January.
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