Author: International Monetary Fund
Publisher: International Monetary Fund
Published: 1989-07-26
Total Pages: 28
ISBN-13: 1451965591
DOWNLOAD EBOOKThis paper analyzes the inflationary process in a centrally planned economy which has an uncontrolled market where prices can move more freely. The maintenance of controls over prices and rationing in the economy leads to the emergence of forces that generate inflation in the uncontrolled market, and that cause shrinkage of the controlled economy as resources move into the uncontrolled market. Decontrol of prices and production of the controlled market is the optimal policy. The adoption of this policy facilitates an increase in income and aggregate demand, which raises the equilibrium prices and total production in the economy.
Book Synopsis Uncontrolled Markets and the Inflationary Process in a Centrally Planned Economy by : International Monetary Fund
Download or read book Uncontrolled Markets and the Inflationary Process in a Centrally Planned Economy written by International Monetary Fund and published by International Monetary Fund. This book was released on 1989-07-26 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the inflationary process in a centrally planned economy which has an uncontrolled market where prices can move more freely. The maintenance of controls over prices and rationing in the economy leads to the emergence of forces that generate inflation in the uncontrolled market, and that cause shrinkage of the controlled economy as resources move into the uncontrolled market. Decontrol of prices and production of the controlled market is the optimal policy. The adoption of this policy facilitates an increase in income and aggregate demand, which raises the equilibrium prices and total production in the economy.