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| Author: | Feltenstein, A. |
| Title: | The role for interest rete during the transition to a market economy |
| Journal: | Economics of Planning
1994 : No. 1 p.1-19 |
| Index terms: | MARKET ECONOMY INTEREST RATES PLANNED ECONOMY CZECHOSLOVAKIA WELFARE |
| Language: | eng |
| Abstract: | We construct a simple two period model for an economy in transition from being centrally planned to being market oriented. Using this model, certain positive conclusions are drawn about economic policies that reduce distortions during the transition period. In particular, it is focused on the role of interest rate. Using stylized data derived from Czechoslovakia it is shown that increse in nominal interest rates can actually be welfare-improving by partially compensating for the distortions induced by the transition process. |
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