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On the Role of Sector Size in Determining the Transition Path
Author(s) -
Femminis Gianluca,
Ruggerone Luigi
Publication year - 1999
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/1467-9957.00163
Subject(s) - restructuring , economics , constraint (computer aided design) , private sector , transition (genetics) , path (computing) , magnitude (astronomy) , relevance (law) , economic system , economic growth , finance , computer science , political science , mathematics , biochemistry , chemistry , physics , geometry , astronomy , law , gene , programming language
This paper is an attempt to capture the relevance of the relative magnitude of the state and the private sectors in making the transition from central planning more likely to succeed. The basic idea that we introduce is that the growth of the new private sector, in an environment characterized by a severe form of credit constraint, depends on its relative magnitude in the economy. We also propose an extension of the model which examines the issue of full privatization versus restructuring in a credit‐constrained environment.