ECON 336 Chapter Notes - Chapter 4: Deng Xiaoping, Profit Maximization, Transact
19 May 2012
School
Department
Course
Professor
Document Summary
Overall reform process consists of two phases: the dual-track reforms. Markets and competition were introduced within the existing framework: the second phase. Restructuring of institutions to make them more compatible with a market economy. For the chinese, different from other socialist regimes, they recognized the need for china to undergo both systemic transformation and economic development simultaneously. Because reformers did not really know where they were going with these reforms, they ensured that policies would be judged on their contribution to economic growth. They also sought to eliminate the serious problems in a command economy. Before they could complete the transition to a market economy, the economy needed to reach at least middle income status. Yeltsin"s russia and china both wanted to move to a modern economy fast. Hence, it would easier for them to start from scratch: the process of big bang would sacrifice short term output, but this was seen as essential to allow markets to work.
