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Please use this identifier to cite or link to this item: http://hdl.handle.net/10466/1000

Title: <ARTICLE>Two-tier Price System and Economic Transition
Authors: Yu, Jinping
Issue Date: 31-Mar-2001
Publisher: College of Economics, Osaka Prefecture University
Citation: Journal of economics, business and law. 2001, 3, p.53-67
Abstract: China adopted a two-tier price system during the long period from 1984 to 1992. In this system, an identical good is offered for sale under different prices and availability conditions on two distinct allocation mechanisms: the government institutions and the market. Few could deny that the two-tier price system is a source of numerous distortions. This paper presents an interpretation of the rationality of this idiosyncratic system. At the beginning of economic transition, the undeveloped market lacked of complete information and corresponding legal institutions. As a transient device, the two-tier price system contributes to avoiding the drastic decrease in output and improving the social welfare.
URI: http://hdl.handle.net/10466/1000
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