Looking at the Pieces

Olivier Blanchard

in The Economics of Post-Communist Transition

Published in print July 1998 | ISBN: 9780198293996
Published online November 2003 | e-ISBN: 9780191595998 | DOI:

Series: Clarendon Lectures in Economics

 Looking at the Pieces

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Chapter 3 examines a number of pieces in more detail. I focus in particular on the adjustment of employment and wages in state firms to the initial shock, on the interactions between restructuring and privatization, and on the relation between reallocation, restructuring and traffic in the labour market. There are many fascinating and little‐understood issues here, from the way an insider‐controlled firm reacts to a large adverse shock to how to design privatization so that it leads to restructuring and why flows in and out of unemployment have been so low despite the high rate of structural transformation. Never has such a political and

economic transformation taken place with so much data collected on firms and people as it happened, but we have barely started exploiting the data. My purpose is to sharpen the discussion and present what we have learnt so far.

Keywords: adjustment; labour market; privatization; reallocation; restructuring; shock; soft budget constraint; state firms; structural transformation; unemployment

Chapter.  11059 words.  Illustrated.

Subjects: Economic Systems

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