A Problem of the Transition from a Planned to a Market Economy: Should Firms Be Subsidized in Order to Avoid Their Bankrupcy?

  • Wilhelm Krelle


It will be shown that in the process of transition from a planned to a market economy subsidies for firms which otherwise would go bankrupt may be socially optimal if they remain below a certain level.


Cash Flow Market Economy Productive Capacity Final Demand Government Subsidy 
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Copyright information

© Springer-Verlag Berlin · Heidelberg 1993

Authors and Affiliations

  • Wilhelm Krelle
    • 1
  1. 1.Bonn 2Germany

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