Resource allocation during the transition to a market economy: policy implications of supply bottlenecks and adjustment costs
This paper explains why a laissez-faire approach may fail to account for externalities in transforming economies, focusing on externalities associated with supply bottlenecks and adjustment costs. Bottlenecks tend to arise whenever input requirements are stochastic and the opportunity cost of holdin...
Gespeichert in:
| Hauptverfasser: | , |
|---|---|
| Format: | Buch |
| Sprache: | English |
| Veröffentlicht: |
Cambridge, Mass.
1993
|
| Schriftenreihe: | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series
4366 |
| Schlagworte: | |
| Zusammenfassung: | This paper explains why a laissez-faire approach may fail to account for externalities in transforming economies, focusing on externalities associated with supply bottlenecks and adjustment costs. Bottlenecks tend to arise whenever input requirements are stochastic and the opportunity cost of holding inventories is high. They are likely to become prevalent in the state industrial sector once budget constraints are hardened and credit markets begin to function properly, since the creditworthiness of state enterprises is limited by outdated production technologies. The analysis recognizes that producers have incentives to form pooling arrangements, supported potentially by market mechanisms, for reallocating stocks of critical inputs. It is shown, however, that such arrangements do not eliminate the externalities, and that the externalities rise in a nonlinear manner with the opportunity cost of holding inventories. The analysis suggests that once budget constraints are hardened, the externalities associated with bottlenecks and adjustment costs provide a case for subsidizing the costs of critical inputs for the state industrial sector, but not for the new private sector. This subsidy declines as the private sectors grows. |
| Beschreibung: | 39 S. graph. Darst. |
Internformat
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| 245 | 1 | 0 | |a Resource allocation during the transition to a market economy |b policy implications of supply bottlenecks and adjustment costs |c Joshua Aizenman ; Peter Isard |
| 264 | 1 | |a Cambridge, Mass. |c 1993 | |
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| 490 | 1 | |a National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |v 4366 | |
| 520 | |a This paper explains why a laissez-faire approach may fail to account for externalities in transforming economies, focusing on externalities associated with supply bottlenecks and adjustment costs. Bottlenecks tend to arise whenever input requirements are stochastic and the opportunity cost of holding inventories is high. They are likely to become prevalent in the state industrial sector once budget constraints are hardened and credit markets begin to function properly, since the creditworthiness of state enterprises is limited by outdated production technologies. The analysis recognizes that producers have incentives to form pooling arrangements, supported potentially by market mechanisms, for reallocating stocks of critical inputs. It is shown, however, that such arrangements do not eliminate the externalities, and that the externalities rise in a nonlinear manner with the opportunity cost of holding inventories. The analysis suggests that once budget constraints are hardened, the externalities associated with bottlenecks and adjustment costs provide a case for subsidizing the costs of critical inputs for the state industrial sector, but not for the new private sector. This subsidy declines as the private sectors grows. | ||
| 650 | 4 | |a Ökonometrisches Modell | |
| 650 | 4 | |a Central planning |x Econometric models | |
| 650 | 4 | |a Mixed economy |x Econometric models | |
| 650 | 4 | |a Resource allocation |x Econometric models | |
| 700 | 1 | |a Isard, Peter |e Verfasser |4 aut | |
| 830 | 0 | |a National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |v 4366 |w (DE-604)BV002801238 |9 4366 | |
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| id | DE-604.BV008282417 |
| illustrated | Illustrated |
| indexdate | 2024-07-09T17:17:43Z |
| institution | BVB |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-005472529 |
| oclc_num | 28472232 |
| open_access_boolean | |
| owner | DE-19 DE-BY-UBM DE-521 |
| owner_facet | DE-19 DE-BY-UBM DE-521 |
| physical | 39 S. graph. Darst. |
| publishDate | 1993 |
| publishDateSearch | 1993 |
| publishDateSort | 1993 |
| record_format | marc |
| series | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |
| series2 | National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series |
| spelling | Aizenman, Joshua 1949- Verfasser (DE-588)124080057 aut Resource allocation during the transition to a market economy policy implications of supply bottlenecks and adjustment costs Joshua Aizenman ; Peter Isard Cambridge, Mass. 1993 39 S. graph. Darst. txt rdacontent n rdamedia nc rdacarrier National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 4366 This paper explains why a laissez-faire approach may fail to account for externalities in transforming economies, focusing on externalities associated with supply bottlenecks and adjustment costs. Bottlenecks tend to arise whenever input requirements are stochastic and the opportunity cost of holding inventories is high. They are likely to become prevalent in the state industrial sector once budget constraints are hardened and credit markets begin to function properly, since the creditworthiness of state enterprises is limited by outdated production technologies. The analysis recognizes that producers have incentives to form pooling arrangements, supported potentially by market mechanisms, for reallocating stocks of critical inputs. It is shown, however, that such arrangements do not eliminate the externalities, and that the externalities rise in a nonlinear manner with the opportunity cost of holding inventories. The analysis suggests that once budget constraints are hardened, the externalities associated with bottlenecks and adjustment costs provide a case for subsidizing the costs of critical inputs for the state industrial sector, but not for the new private sector. This subsidy declines as the private sectors grows. Ökonometrisches Modell Central planning Econometric models Mixed economy Econometric models Resource allocation Econometric models Isard, Peter Verfasser aut National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series 4366 (DE-604)BV002801238 4366 |
| spellingShingle | Aizenman, Joshua 1949- Isard, Peter Resource allocation during the transition to a market economy policy implications of supply bottlenecks and adjustment costs National Bureau of Economic Research <Cambridge, Mass.>: NBER working paper series Ökonometrisches Modell Central planning Econometric models Mixed economy Econometric models Resource allocation Econometric models |
| title | Resource allocation during the transition to a market economy policy implications of supply bottlenecks and adjustment costs |
| title_auth | Resource allocation during the transition to a market economy policy implications of supply bottlenecks and adjustment costs |
| title_exact_search | Resource allocation during the transition to a market economy policy implications of supply bottlenecks and adjustment costs |
| title_full | Resource allocation during the transition to a market economy policy implications of supply bottlenecks and adjustment costs Joshua Aizenman ; Peter Isard |
| title_fullStr | Resource allocation during the transition to a market economy policy implications of supply bottlenecks and adjustment costs Joshua Aizenman ; Peter Isard |
| title_full_unstemmed | Resource allocation during the transition to a market economy policy implications of supply bottlenecks and adjustment costs Joshua Aizenman ; Peter Isard |
| title_short | Resource allocation during the transition to a market economy |
| title_sort | resource allocation during the transition to a market economy policy implications of supply bottlenecks and adjustment costs |
| title_sub | policy implications of supply bottlenecks and adjustment costs |
| topic | Ökonometrisches Modell Central planning Econometric models Mixed economy Econometric models Resource allocation Econometric models |
| topic_facet | Ökonometrisches Modell Central planning Econometric models Mixed economy Econometric models Resource allocation Econometric models |
| volume_link | (DE-604)BV002801238 |
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