Bitte verwenden Sie diesen Link, um diese Publikation zu zitieren, oder auf sie als Internetquelle zu verweisen: https://hdl.handle.net/10419/74990 
Autor:innen: 
Erscheinungsjahr: 
2004
Schriftenreihe/Nr.: 
LICOS Discussion Paper No. 153
Verlag: 
Katholieke Universiteit Leuven, LICOS Centre for Transition Economics, Leuven
Zusammenfassung: 
In this paper, we attempt to fill the gap in theoretical explanations of a large output decline that took place in the early years of transition process. The prevalent explanations, commonly found under the title of disorganisation, are succesful in explaining output decline in countries of firmer Soviet Union, but less so for Central and Eastern European countries. The model we develop shares the cause of output decline with disorganisation - price liberalisation, however, the decline takes place only under a set of plausible assumptions: adjustment costs to labor mobility across economic sectors and large benefits to inactivity in a firm of either government transfers or reservation wage earned in infirmal economy. Liberalisation of prices in a firm of removal of distortionary taxes creates incentives for labor mobility from a declining sector to inactivity. The decline takes place only in a part of the economy, while the rest of the economy stagnates or slowly grows. Since the model does not have a closed-firm solution, we analyze the equilibrium allocation using simulation methods. We also discuss the political economy of refirms and identify the conditions under which rational voters under majoritarian voting rule would support the price liberalisation.
Schlagwörter: 
liberalization
transition
recession
adjustment cost
government transfers
reservation wage
heterogeneity
JEL: 
F11
J21
J60
O11
O17
Dokumentart: 
Working Paper

Datei(en):
Datei
Größe
323.17 kB





Publikationen in EconStor sind urheberrechtlich geschützt.