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• W2078250351 abstract "We develop a general equilibrium model that jointly considers the influence of capital accumulation constraints and of labour market frictions on the process of transition. We endogenize the economic and budgetary costs of different government policies and show that, early in transition, governments ought to subsidize state firms. Provided that intertemporal commitment is feasible, this policy limits the initial output fall, which relaxes capital accumulation constraints, accelerates transition, and increases welfare. Moreover, by resorting to indirect - instead of direct - taxes, governments can bring the path of transition closer to the first best. Yet, political pressures may induce a policy of suboptimal subsidization." @default.
• W2078250351 created "2016-06-24" @default.
• W2078250351 creator A5074909146 @default.
• W2078250351 date "2003-10-03" @default.
• W2078250351 modified "2023-09-23" @default.
• W2078250351 title "Public Finance and the Optimal Speed of Transition" @default.
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