Price Liberalization in a Reforming Socialist Economy: A Search Equilibrium Approach

30 Pages Posted: 15 Feb 2006

See all articles by Domenico Fanizza

Domenico Fanizza

International Monetary Fund (IMF) - Middle East and Central Asia Department

Date Written: May 1992

Abstract

A bilateral search model of the commodity market is formulated to study the effects of liberalizing prices in a reforming socialist economy. The main result is that if the competitive structure of the economy is not quickly modified to eliminate supply rents, price liberalization may be accompanied by substantial output losses. A role for tax policy in limiting output losses is identified.

JEL Classification: P22, D40, D83

Suggested Citation

Fanizza, Domenico, Price Liberalization in a Reforming Socialist Economy: A Search Equilibrium Approach (May 1992). IMF Working Paper No. 92/44, Available at SSRN: https://ssrn.com/abstract=884786

Domenico Fanizza (Contact Author)

International Monetary Fund (IMF) - Middle East and Central Asia Department ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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