Is 'Getting The Prices Right' Always Right? How Trade Liberalization Can Fail
We present a general equilibrium model with oligopsonistic market structure in one of the sectors. Buyers of inputs can set the price of inputs by being involved in rent seeking activities. The framework developed is applied to the Bulgarian economy in particular to the agro-food chain. From the application to the Bulgarian economy we find that if there are market imperfections, such as oligopsonistic behavior in the economy, there are no significant welfare gains from free trade. Significant welfare gains from trade are observed only when a competitive structure prevails. We show that eliminating this market imperfection can bring important welfare implications and an efficient reallocation of resources.
|Date of creation:||2000|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- S. Fisher & R. Sahay & C. A. Vegh, 1997.
"Stabilization and Growth in Transition Economies: The Early Experience,"
N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 5.
- Stanley Fischer & Ratna Sahay & Carlos A. Vegh, 1996. "Stabilization and Growth in Transition Economies: The Early Experience," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 45-66, Spring.
- Stanley Fischer & Carlos A. VÃ©gh Gramont & Ratna Sahay, 1996. "Stabilization and Growth in Transition Economies: The Early Experience," IMF Working Papers 96/31, International Monetary Fund.
- Fischer, Stanley & Sahay, Ratna & Vegh, Carlos, 1996. "Stabilization and growth in transition economies: The early experience," MPRA Paper 20631, University Library of Munich, Germany.
- Anne Marie Gulde, 1999. "The Role of the Currency Board in Bulgaria's Stabilization," IMF Policy Discussion Papers 99/3, International Monetary Fund.
- Ernesto HernÃ¡ndez-CatÃ¡, 1997. "Liberalization and the Behavior of Output During the Transition From Plan to Market," IMF Working Papers 97/53, International Monetary Fund.
- Patrick J. Kehoe & Timothy J. Kehoe, 1994. "A primer on static applied general equilibrium models," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 2-16.
- Ernesto HernÃ¡ndez-CatÃ¡, 1997. "Liberalization and the Behavior of Output during the Transition from Plan to Market," IMF Staff Papers, Palgrave Macmillan, vol. 44(4), pages 405-429, December.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea00:21881. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.