Plans And Disequilibria In Centrally Planned Economies (Empirical Investigation For Poland) PDF
Preview Plans And Disequilibria In Centrally Planned Economies (Empirical Investigation For Poland)
PLANS AND DISEQUILIBRIA IN CENTRALLY PLANNED ECONOMIES (Empirical Investigation for Poland) CONTRIBUTIONS TO ECONOMIC ANALYSIS 159 Honorary Editor: J. TINBERGEN Editors: D. W. JORGENSON J. WAELBROECK NORTH-HOLLAND AMSTERDAM NEW YORK · OXFORD · TOKYO PLANS AND DISEQUILIBRIA IN CENTRALLY PLANNED ECONOMIES (Empirical Investigation for Poland) WOJCIECH CHAREMZA, MIROSLAW GRONICKI University of Gdansk, Poland NH 1988 NORTH-HOLLAND AMSTERDAM · NEW YORK · OXFORD TOKYO PWN—POLISH SCIENTIFIC PUBLISHERS · WARSAW (ς) PWN—POLISH SCIENTIFIC PUBLISHERS—WARSZ AW A—1988 AU rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photo- copying, recording or otherwise, without the prior permission of the copyright owner. ISBN for this series: 0 7204 3100 X ISBN for this volume: 0 444 70100 1 Publishers : ELSEVIER SCIENCE PUBLISHERS B. V. P. O. Box 1991 1000 BZ Amsterdam The Netherlands PWN—POLISH SCIENTIFIC PUBLISHERS Warszawa Sole distributors for the U. S. A. and Canada ELSEVIER SCIENCE PUBLISHING COMPANY, INC. 52 Vanderbilt Avenue New York, N. Y. 10017 U. S. A. Library of Congress Cataloging-in-Publication Data Charemza, Wojciech. Plans and disequilibria in centrally planned economies: empirical investi- gation for Poland/Wojciech Charemza, Mirostaw Gronicki. p. cm.—(Contributions to economic analysis: 159) Bibliography: p. ISBN 0-444-70100-1 (U.S.) 1. Equilibrium (Economics) 2. Economic policy. 3. Central planning—Poland. 4. Poland—Economic policy. I. Gronicki. Miroslaw. II. Title. III. Series. HB145.C47 1987 339.5—dc 19 87-22891 C1P PRINTED IN POLAND INTRODUCTION TO THE SERIES This series consists of a number of hitherto unpublished studies, which are introduced by the editors in the belief that they represent fresh contributions to economic science. The term 'economic analysis' as used in the title of the series has been adopted because it covers both the activities of the theoretical economist and the research worker. Although the analytical methods used by the various contributors are not the same, they are nevertheless conditioned by the common origin of their studies, namely theoretical problems encountered in practical research. Since for this reason, business cycle research and national accounting, research work on behalf of economic policy, and problems of planning are the main sources of the subjects dealt with, they necessarily determine the manner of approach adopted by the authors. Their methods tend to be 'practical' in the sense of not being too far remote from application to actual economic conditions. In addi- tion they are quantitative. It is the hope of the editors that the publication of these studies will help to stimulate the exchange of scientific information and to reinforce international cooperation in the field of economics. The Editors This page intentionally left blank CONTENTS Introduction to the Series V Contents VII Preface IX Part 1: Foundations Chapter L Background: Facts and figures from Polish economic history 3 Chapter 2. The theoretical model 2.1. Households' behaviour and expectations 9 2.2. State sector behaviour 19 2.3. Disequilibrium indicators 26 Part 2: Consumption-Labour-Money Analysis Chapter 3. Econometric model and its estimation 3.1. Structural form and statistical data 37 3.2. Respecification and preliminary estimation 43 3.3. Final estimation 49 3.4. Linearization 55 Chapter 4. Estimates of disequilibria and their effects 4.1. Estimates of unconditional disequilibria 63 4.2. Measures of repressed inflation 70 4.3. Excess demand decomposition and estimates of conditional dis- equilibria 74 VIII Contents Chapter 5. Internal monetary policies 5.1. Policy simulations: Some theoretical and technical questions . .. 83 5.2. A simple PW policy 87 5.3. Planning distance and expectations errors 90 5.4. PWC#) policy and labour hoardings 96 5.5. Change of currency: Was it a solution? 99 Chapter 6. Searching for an optimal monetary policy 6.1. Disequilibrium neutralization as an optimal control problem . .. 105 6.2. Households' optimal income and money policies 107 6.3. Optimal policies and plans 113 Part 3: Extensions Chapter 7. Disequilibria and investments: Some inward policies 7.1. Production and investments: First extension of the model . . .. 123 7.2. Inward effects of the PWH(5) policy: Consumption volume and plan- ners' tensions 130 7.3. Direct interventions in investment: Smoothing and private economy problem 135 7.4. Under- and overinvestment in a long-run 140 Chapter 8. Disequilibria and foreign trade : Some external policies 8.1. Foreign trade: A further extension of the model 145 8.2. Constant foreign debt isolated policy 150 8.3. Constant foreign debt and CMEA acitve policy 154 Chapter 9. Summary and conclusions: The best ex-post scenario? 161 Appendix 165 References 171 List of Tables 180 Author Index 182 Subject Index 185 PREFACE The purpose of this study is to investigate interrelations between plan- ning mechanisms and disequilibria in a case where the planning decisions are centralized and are exogenously given to enterprises. A particularly important question in this context is whether disequilibrium (or more precisely: positive excess demand on consumption and labour markets) is a necessary fate of centrally planned economies, or whether it could be replaced by another disequilibrium regime at a certain stage of their development. An answer to this can be given by discussing some auxiliary problems: in particular—can a planning mechanism be used as an efficient tool in reducing disequilibrium, what is the role of money, prices and wages in excess demand formation, and is foreign trade an accelerator or a brake with respect to equilibrium? Perhaps the most controversial question is : 'Is it possible to equilibrate markets (to go sufficiently close to equilibrium) over a certain period with the use of some policy instruments and, if so, what should the desired levels of these instruments be?' Our intention has been to build a model which could be used generally to answer these questions. It is exemplified by the case of the Polish economy. Apart from our national preferences, Polish economy in the sixties and seventies seems to be a promising field for the application of a disequilibrium theory. Phenomena such as full employment and growth, full employment and economic collapse, changes in foreign trade and investment policies, overnight changes in the degree of repressed inflation, 'price revolutions', panic buying and shortages were more evident in Poland than in the other CMEA countries. Last but not least, the statistical data which have been available to us are in relatively good supply. We have not tried to go beyond 1980. Since 1980 so many drastic changes have been made in the economic structure of Poland that the
The list of books you might like
