How can the new governments of Eastern Europe succeed in moving from centrally planned to freemarket economies? This incisive report identifies the major policy choices to be made and discusses what will work and what will not.
Reform in Eastern Europe provides a comprehensive, accessible statement of reform policy that stands in the mainstream of modern Western economics. Based on their experience with stabilization policies in other countries, the authors show how Eastern Europe can reduce unemployment during the painful adjustment process, create effective and socially acceptable mechanisms to subject enterprises to market discipline, and replace barter trade under CMEA with market-based international trade.
Although conditions vary from country to country in Eastern Europe, Reform in Eastern Europe argues that all countries must seek stabilization and price liberalization, privatization, and then economic restructuring. It describes and evaluates the alternatives available to eliminate fiscal deficits, control money creation, and decontrol prices while blunting the immediate painful effects of lower wages, unemployment, and other disruptions.
The authors propose a plan for privatizing stateowned enterprises without placing them in the hands of those who accumulated wealth under the communist regimes. They recommend and detail methods for achieving orderly restructuring—in effect, closing most of the existing production structures and creating a whole new economy—covering issues of national saving, the creation of a financial intermediation system, the role of direct investment, labor allocation, and unemployment.
The Tax Policy and Economy series presents new research bearing on the effects of taxation on economic performance and analyzing the effects of potential tax reforms. Research results are, presented in a timely and accessible fashion.Volume 4 includes contributions by Glenn Hubbard, Lawrence Goulder, Lawrence Summers, Daniel Feenberg, and Eytan Sheshinski.Lawrence H. Summers is Professor of Economics at Harvard University and Research Associate at the National Bureau of Economic Research.
Tax policy debates, generated by one of the most sweeping reforms of the Federal income tax system since its inception, are certain to continue for years to come, providing a fertile field for economic research. This book is the first in a series of annual publications on tax policy and the economy initiated by the National Bureau of Economic Research and designed to convey research results in a way that is accessible to a wide body of lawyers, policymakers, and businesspeople involved in formulating tax policy.
Volume 1 of Tax Policy and the Economy presents six studies of diverse tax policy issues, each bringing new data to bear on an important policy issue. Alan Auerbach and James Poterba examine the striking decline in corporate tax revenues as a share of GNP John Shoven describes new developments in corporate finance and tax avoidance, concluding that these devices have helped and will continue to help corporate shareholders escape the double taxation of dividends.
Herman Leonard and Richard Zeckhauser review the experience of several states with tax amnesty programs and consider the likely effects of a Federal tax amnesty program. Jeffrey Harris explores the economic effects of tobacco taxation, particularly the effect the recent hike in the Federal excise tax on cigarettes had on prices and on the number of smokers. Douglas Bernheim suggests that the Federal estate tax could conceivably reduce Federal tax revenues. And in a concluding chapter, Michael Boskin and Douglas Puffert show that the redistributions between married workers and single workers in the Social Security system far outweigh the much discussed "marriage tax" effects of the individual income tax.
Lawrence H. Summers is Professor of Economics at Harvard University and Research Associate at the National Bureau of Economic Research.