IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/510.html
   My bibliography  Save this paper

Intertemporal Speculation, Shortages and the Political Economy of Price Reform: A Case Against Gradualism

Author

Listed:
  • van Wijnbergen, Sweder

Abstract

How should countries like Poland or the USSR move towards price flexibility, gradually or in a `big bang'? Why is it that governments committed to eventual price flexibility so often seem to be unable to let go of `temporary' controls? How can one explain that after price increases early in a programme of price controls, one often sees output rise while at the same time shortages also seem to increase? This paper argues that intertemporal speculation, hoarding and the political economy of price reform go a long way towards explaining all these puzzles. We show that the interaction between shortages and political vulnerability of reformist governments to early perceptions of failure make for a strong argument against gradualism in the decontrol of prices.

Suggested Citation

  • van Wijnbergen, Sweder, 1991. "Intertemporal Speculation, Shortages and the Political Economy of Price Reform: A Case Against Gradualism," CEPR Discussion Papers 510, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:510
    as

    Download full text from publisher

    File URL: http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=510
    Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cecilia Testa, 2005. "Reforms, lobbies and welfare: A common agency approach," Public Choice, Springer, vol. 125(3), pages 305-337, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:510. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://www.cepr.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.