ABSTRACT
The approach is a macroeconomic one, based on actual response of economic agents to new economic conditions that is it is a macroeconomic model based on microeconomic decisions and their aggregation. It requires a preparatory phase of planning the transition, which might require 6-12 months depending on the efficiency of Central Plan Bureau, itself and its communication with firms, and on the speed of political decision making. The move is into the worst situation, in the sense, over time things can only change for the good. Decisions regarding how open the economy would be to start with and level of protection will determine the outcome in wages, output and employment, exports. After the move, there will be no inflationary effect provided that budgetary balance is maintained and excessive monetary expansion is avoided. The system presupposes existence of a Central plan mechanism and its efficient functioning until the move.
