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From Centrally Planned to Market Economy: The Road from CPE to PCPE

Author

Listed:
  • Guillermo A. Calvo

    (International Monetary Fund)

  • Jacob A. Frenkel

    (International Monetary Fund)

Abstract

The early stages of transformation of centrally planned economies into market economies are examined. In the transitional phase when an economy is no longer centrally planned, but not yet market based--when it is a "previously centrally planned economy"--expectations play a key role. A model is developed to analyze the consequences of expected price liberalization, and the benefits from early development of financial markets and speedy implementation of price reform are demonstrated. Ways to reduce liquidity overhang are examined, the consequences of privatization are analyzed, and the benefits of an effective tax system are highlighted.

Suggested Citation

  • Guillermo A. Calvo & Jacob A. Frenkel, 1991. "From Centrally Planned to Market Economy: The Road from CPE to PCPE," IMF Staff Papers, Palgrave Macmillan, vol. 38(2), pages 268-299, June.
    • Handle: RePEc:pal:imfstp:v:38:y:1991:i:2:p:268-299
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    Citations

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    Cited by:

    1. Wesley C. Marshall, 2012. "International Capital Flows and Latin America: Making Sense of Disappointing Results," Chapters, in: Claude Gnos & Louis-Philippe Rochon & Domenica Tropeano (ed.), Employment, Growth and Development, chapter 13, Edward Elgar Publishing.
    2. Steve H. Hanke and Kurt Schuler, 1993. "Currency Boards and Currency Convertibility," Cato Journal, Cato Journal, Cato Institute, vol. 12(3), pages 687-727, Winter.
    3. Goldberg, Linda S. & Karimov, Il'dar, 1997. "Black markets for currency, hoarding activity and policy reforms," Journal of International Economics, Elsevier, vol. 42(3-4), pages 349-369, May.
    4. Fardmanesh, Mohsen & Tan, Li, 1996. "Wage and Price Control Policies in Socialist Transitional Economies," Center Discussion Papers 28515, Yale University, Economic Growth Center.
    5. Linda S. Goldberg & Ildar Karimov, 1992. "Black-Markets for Currency, Hoarding Activity and Currency Reform," NBER Working Papers 4153, National Bureau of Economic Research, Inc.
    6. repec:ilo:ilowps:287851 is not listed on IDEAS
    7. Bertrand CRETTEZ & Claire LOUPIAS & Philippe MICHEL, 1997. "A theory of the optimal amount of public ownership of land," Discussion Papers (REL - Recherches Economiques de Louvain) 1997031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    8. Fardmanesh, Mohsen & Tan, Li, 2003. "Wage and price control policies in transition economies," Journal of Development Economics, Elsevier, vol. 70(1), pages 173-200, February.
    9. Chadha, Bankim & Coricelli, Fabrizio, 1997. "Fiscal constraints and the speed of transition," Journal of Development Economics, Elsevier, vol. 52(1), pages 221-249, February.
    10. A. James Meigs, 1993. "Eurodollars: A Transition Currency," Cato Journal, Cato Journal, Cato Institute, vol. 12(3), pages 711-730, Winter.
    11. Bomhoff, Eduard J., 1992. "Monetary reform in Eastern Europe," European Economic Review, Elsevier, vol. 36(2-3), pages 454-458, April.
    12. Truong Dhd. & Gates, C. L., 1992. "Effects of government policies on the incentive to invest, enterprise behaviour and employment: the case study of Vietnam," ILO Working Papers 992878513402676, International Labour Organization.
    13. Guillermo A. Calvo & Jacob A. Frenkel, 1991. "Credit Markets, Credibility, and Economic Transformation," Journal of Economic Perspectives, American Economic Association, vol. 5(4), pages 139-148, Fall.

    More about this item

    JEL classification:

    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • F30 - International Economics - - International Finance - - - General

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