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Shortages, Hoarding and Parallel‐Market Premia in an Economy with Administered Prices
Author(s) -
Djajić Slobodan
Publication year - 1999
Publication title -
review of development economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.531
H-Index - 50
eISSN - 1467-9361
pISSN - 1363-6669
DOI - 10.1111/1467-9361.00047
Subject(s) - hoarding (animal behavior) , economics , economic shortage , market clearing , context (archaeology) , consumption (sociology) , monetary economics , clearing , monetary policy , macroeconomics , medicine , paleontology , social science , linguistics , philosophy , finance , government (linguistics) , biology , sociology , feeding behavior
This paper examines the implications of a number of policy changes in the context of a dynamic model of an economy with administered prices. Official prices below the market‐clearing level give rise to shortages, hording, and parallel‐market activity. The paper examines the implications for consumption, hoarding, and the parallel‐market premium of changes in official prices and wages, a crackdown on hoarding, and a monetary reform.