Survey the Relative Prices Reform Efficiency in the Context of Difference between Objectives of Structural Adjustment and its Consequences

اقتصاد پولی مالی

Article 2, Volume 17, Issue 30, January 2011   

Document Type: پژوهشی

DOI: 10.22067/pm.v17i30.27236

Authors

Mohammad Hossein Mahdavi Adeli^* ; Mohammadreza Kalaei

Abstract

"Structural adjustment" is the name given to a set of "free market" economic policy
reforms. Reforming of relative prices is the main building bloc of structural
adjustment programs. This paper attempts to compare the interactions among the
variables in the structural adjustment policy package with the status of theoretical
predictions by the Washington Consensus and at the same time, it investigate the
efficiency of correction in the relative prices in Iran. Therefore, in the first part of
the article, the concepts of adjustment and its roots in the Neoclassical theories and
structural adjustment limit is expressed. Then in the next section, it deals with
Schematic Summary of Iran's macroeconomic system and theoretical system of the
Washington Consensus. Then, the paper, with comparing the performance of
structural adjustment in both theoretical and real situations, assesses efficiency of
relative prices reform. In the third part, relying on specific characteristics of the
Iranian economy, difference between objectives of structural adjustment and its
consequences in Iran's economy is expressed. Results present "the structural
adjustment puzzle" and attention to this puzzle in the relative prices reform is the
most important recommendation in this article.

Keywords

Structural Adjustment; Washington Consensus; Relative Price; simulation; Simultaneous Equation System