Output Collapse in Transitional Economies: A Possible Explanation Using a Two-sector Mesoeconomic Model Zhao, Yimin Ng, Yew-Kwang 10.4225/03/5937794ba55c4 https://bridges.monash.edu/articles/journal_contribution/Output_Collapse_in_Transitional_Economies_A_Possible_Explanation_Using_a_Two-sector_Mesoeconomic_Model/5084893 Using a two-sector mesoeconomic model, the paper examines the short-term effects of the demand shift between different sectors resulted from the economic liberalisation in a transitional economy, especially focussing on Russia. Findings are that, for a transitional economy without a well-functioning factor market, the demand shift may cause a short term economic slump. Moreover, the possibility of an economic slump is higher when there are unfavorable effects from changes in the price elasticity of demand. 2017-06-07 03:55:54 Economic slump 1997 Transitional economy monash:7004 Demand shift Representative firm 1959.1/36401 Economic restructure Mesoeconomics