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Title: Macroeconomic Equilibrium and Reform in a Transitional Economy

Author(s): Huw David Dixon

Publication Date: January 1993

Keyword(s): Imperfect Competition, Macroeconomics and Transitional Economy

Programme Area(s): International Macroeconomics

Abstract: We build a general equilibrium macroeconomic model of a transitional economy to reflect five stylized facts. Among these are that central planning has left a legacy of highly concentrated industry and a residue of price controls and rationing. An `almost Classical' dichotomy obtains in the model: monetary expansion leaves output and unemployment unchanged (despite the existence of unemployment), though leisure time declines. The economy displays a high degree of complementarity between the state-controlled sector and the private sector, however, giving rise to multiplier effects. We analyse the effects of price liberalization and privatization in this framework.

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Bibliographic Reference

Dixon, H. 1993. 'Macroeconomic Equilibrium and Reform in a Transitional Economy'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=758