The Effects of Reforming the Chinese Dual-Track Price System

Hence, substituting for dp from (13), we have

dv
dp

-v_mx

S - xp

S — (x — x)x_m — xp

< 0.

Similarly, assuming p > p and v_m > 0, it is found that

dv
dx

^vm

, (^xdx

— x) + (p — p)

= v_m(p — p)

S — xp

S — (x — x)x_m — xp

> 0.

Proposition 5

Differentiating (17) w.r.t. p yields

dP x + χ p

dp x¹ x¹

p + (1

x) dp
x^{17 j} dpi

(25)

dP
dx)

a
x¹

— —

(p — p) + [α-p—p ⅛ + (1

x¹ p ^p

x d j dp
x¹ dx)

(26)

Substituting for dp from (13) and using x = x^s > x¹, we obtain

dP αXx £aS¹ + (1 — α)S² — (1 — α)x²xm — xp — ax((x^s — x¹)]
dpi α[S¹ — x1_m(x¹ — x)] + (1 — α)(S² — x²x‰) — xp

Similarly, substituting for dp from (14), we have