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The macroeconomics of price reform in socialist countries : a dynamic framework (English)

This paper emphasizes the fiscal underpinnings of the inflationary process and those particular dynamics when a dual price system is present. In particular, it explores the links between price controls and decontrols and the government budget, mainly through the flow of subsidies to either consumers or producers. A clear conclusion is that without consistency in macroeconomic policy, price liberalization may simply exacerbate imbalances and ultimately provide a mechanism for sustaining inflation, hence compromising a basic objective of macroeconomic policy.

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Citation

Commander, Simon Coricelli, Fabrizio

The macroeconomics of price reform in socialist countries : a dynamic framework (English). Policy, Research, and External Affairs working papers ; no. WPS 555. Macroeconomic adjustment and growth Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/429851468771614500/The-macroeconomics-of-price-reform-in-socialist-countries-a-dynamic-framework