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Shortages, Hoarding and Parallel‐Market Premia in an Economy with Administered Prices

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  • Slobodan Djajić

Abstract

This paper examines the implications of a number of policy changes in the context of a dynamic model of an economy with administered prices. Official prices below the market‐clearing level give rise to shortages, hording, and parallel‐market activity. The paper examines the implications for consumption, hoarding, and the parallel‐market premium of changes in official prices and wages, a crackdown on hoarding, and a monetary reform.

Suggested Citation

  • Slobodan Djajić, 1999. "Shortages, Hoarding and Parallel‐Market Premia in an Economy with Administered Prices," Review of Development Economics, Wiley Blackwell, vol. 3(1), pages 1-10, February.
    • Handle: RePEc:bla:rdevec:v:3:y:1999:i:1:p:1-10
    DOI: 10.1111/1467-9361.00047
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    References listed on IDEAS

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