Plan and market in the Chinese economy: A simple general equilibrium model

The Macroeconomic Effects of Waiting Workers in the Chinese Economy

“…These new phenomena require new theories and models for economists to undertake formal analysis and empirical studies of such countries. This paper, consistent with the work of Byrd (1989) and of Dixon (1995, 1996), presents a two-sector macroeconomic model emphasizing the problems of state-owned enterprises (SOEs) in China. Before conducting the theoretical analysis, we present some stylized facts as background for the model.…”

Financial Resources and Product Market Development: Strategic Choice and Institutional Processes During China's Transition

“…The results provide evidence for our hypotheses that between 1980 and 1984, receiving more bank loans increased reliance on product markets (Table II) and also increased the proportion of resources committed to markets (Table III). However, between 1985 and1989, this relationship appears to have reversed. This suggests that government action produced a very important change in firm behavior, regardless of whether it was intended to produce this change.…”

“…While decisions about the acquisition of producer goods appear to be among the most purely financial decisions that a firm makes, a variety of factors, only some of which are strictly economic, contribute to this process. First, we argue that access to nonstate funds in a financial market signals an opportunity to reduce dependence on the state and encourages firm expansion to product markets (Byrd, 1989;Keister, 2000:57;Naughton, 1995:106, 113). Second, we argue that not all funding sources have the same effect on firm behavior, and the different effects reflect joint strategic choice and responses to institutional pressures.…”

The Kornai effect with partial bailouts and taxes

“…1 It can be argued that expected profit is not an unreasonable proxy for the manager's utility function in at least some socialist economies, where the manager's bonus is correlated with the enterprise's profit, as has been the case in China for some time. Thus, profit maximization in a planned economy context is explicitly assumed by Byrd (1989). But we argue further that models of the present type should be thought of as applicable to free-market environments as well, in which tax and subsidy mechanisms are in operation.…”