Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/221480
Title: 
Authors: 
Matsuyama, Kiminori
Year of Publication: 
1995
Series/Report no.: 
Discussion Paper 1124
Abstract: 
The standard practice in economic theory is to assume that all the relevant variables (e.g., the space of all the goods of potential economic value) and all the relevant constraints are known to the policymaker or to the designer of an economic system. This often unstated assumption (or the belief implictly embodied in it) inadvertently creates an illusion about our ability to design an economic system and control the process of resource allocation. In this paper, a series of examples is developed to illustrate that this modelling approach has the danger of misdirecting our attention when evaluating alternative forms of economic system. Some implications for reforms in the former socialist economies are also drawn.
Document Type: 
Working Paper

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