The paper introduces differences in production and transaction conditions between countries into a model of monopolistic competition. It applies inframarginal analysis to show that, as transaction conditions are improved, the general equilibrium may jump discontinuously across different patterns...

This paper investigates the relationship between economic reforms and constitutional transition, which has been neglected by many transition economists. It is argued that assessment of reform performance might be very misleading if it is not recognized that economic reforms are just a small part...