DP91 The Theory and Measurement of Macroeconomic Disequilibrium in Centrally Planned Economies
|Publication Date:||January 1986|
|Keyword(s):||Centrally Planned Economies, Disequilibrium, Planners' Behaviour, Rationing and Shortages, Repressed Inflation|
|JEL(s):||023, 027, 052|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=91|
The paper considers issues in recent research on macroeconomic equilibrium in centrally planned economies. I defend the explicit aggregative, macroeconomic approach in theory, institutional relationships and measurement. It has offered a fresh, coherent framework for the analysis of many Centrally Planned Economies phenomena, opened up a range of possibilities for empirical investigation, and generated several important spinoffs: work on planners' behaviour; insights into CPE policy problems of the 1970s and early 1980s, which centred on macroeconomic equilibrium and threats to it; and some developments in market economy macro theory and econometrics. The quantity-rationing macro model and disequilibrium econometrics give a more useful as well as a more nuanced view of macroeconomic reality in CPEs than the conventional wisdom characterizing them as perpetual "shortage economies".