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Problems of Transition from a Planned to a Market Economy

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  • Krelle, Wilhelm

Abstract

The paper shows that a transition from a planned to a market economy implies an important change of the structure of production, i. e. a reallocation of resources which takes time and induces sufferings for some people. These sufferings may be reduced by subsidization of some sectors, with some negative effects on GDP and growth if subsidization exceeds a certain size. The time tillthe economy in transition reaches an ``old" market economy (asymptotically or totally) is estimated by different methods. Finally other problems, mostly non--economic ones, which are connected with the transition process are discussed.

Suggested Citation

  • Krelle, Wilhelm, 2000. "Problems of Transition from a Planned to a Market Economy," Bonn Econ Discussion Papers 4/2000, University of Bonn, Bonn Graduate School of Economics (BGSE).
    • Handle: RePEc:zbw:bonedp:42000
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    File URL: https://www.econstor.eu/bitstream/10419/78380/1/bgse4_2000.pdf
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    References listed on IDEAS

    as
    1. Andrei Shleifer, 1998. "State versus Private Ownership," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 133-150, Fall.
    2. De Fraja, Giovanni, 1993. "Productive efficiency in public and private firms," Journal of Public Economics, Elsevier, vol. 50(1), pages 15-30, January.
    3. Schmidt, Klaus M., 1996. "Incomplete contracts and privatization," European Economic Review, Elsevier, vol. 40(3-5), pages 569-579, April.
    4. Michael D. Intriligator, 1964. "Regional Allocation of Investment: Comment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(4), pages 659-662.
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    Cited by:

    1. Aysel Amir & Korhan Gökmenoğlu, 2023. "Analyzing the Drivers of the Shadow Economy for the Case of the CESEE Region," Journal of Economics / Ekonomicky casopis, Institute of Economic Research, Slovak Academy of Sciences, vol. 71(2), pages 155-181, February.

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    More about this item

    Keywords

    transition; planned economy; market economy; economic ones; which are connected with the transition process are discussed.;
    All these keywords.

    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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