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Output Collapse in Transitional Economies: A Possible Explanation Using a Two-sector Mesoeconomic Model

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journal contribution
posted on 07.06.2017 by Zhao, Yimin, Ng, Yew-Kwang
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.

History

Year of first publication

1997

Series

Department of Economics.

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