01805cas a2200253 a 4500 AALejournalIMF004012 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451842241 1018-5941 BD-DhAAL BD-DhAAL Isard, Peter. Resource Allocation During the Transition to a Market Economy : Policy Implications of Supply Bottlenecks and Adjustment Costs / Peter Isard, Joshua Aizenman. Washington, D.C. : International Monetary Fund, 1993. 1 online resource (41 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The paper discusses the case against a laissez faire approach to resource allocation and develops a model of supply bottlenecks. It argues that: (1) once budget constraints are hardened and credit markets begin to function appropriately, externalities associated with production bottlenecks and adjustment costs--other considerations aside--provide a case for subsidizing the costs of critical inputs for the state sector but not the new private sector; (2) the optimal subsidy declines as the private sector grows; and (3) the subsidy should be 'financed' by taxing wage income in the state sector, which will strengthen incentives for workers to move. Mode of access: Internet Aizenman, Joshua. IMF Working Papers; Working Paper ; No. 1993/006 Full text available on IMF http://elibrary.imf.org/view/journals/001/1993/006/001.1993.issue-006-en.xml IMF e-Library