A formal model of intermediate product reallocation through Second Economy markets in a centrally planned economy is discussed. The principal result is that there exists an equilibrium allocation determined in these Second Economy markets in spite of fixed official prices and centrally monitored...

One legacy of the Soviet-type economy is the highly inefficient, and sometimes value-destroying, structure of factor use and economic interaction [Hughes and Hare (1994)]. This structure was sustainable only by virtue of distorted prices, hiding true costs, and by the force of command that...

The paper argues that a key legacy of the Soviet-type command economy is the highly inefficient, often value- destroying, structure of factor use and economic interaction. This structure was sustainable only by virtue of distorted prices and the force of command that maintained interactions...