Macroeconomic Planning and Disequilibrium: Estimates for Poland, 1955-1980

Abstract

This paper specifies and estimates a four-equation disequilibrium model of the consumption goods market in a centrally planned economy (CPE). The data are from Poland for the period 1955-1980, but the analysis is more general and will be applied to other CPEs as soon as the appropriate data sets are complete. This work is based on previous papers of Portes and Winter (P-W) and Charemza and Quandt (C-Q). P-W applied to each of four CPEs a discrete-switching disequilibrium model with a household demand equation for consumption goods, a planners' supply equation, and a "mm" condition stating that the observed quantity transacted is the lesser of the quantities demanded and supplied. C-Q considered how an equation for the adjustment of planned quantities could be integrated into a CPE model with fixed prices and without the usual price adjustment equation. They made plan formation endogenous and permitted the resulting plan variables to enter the equations determining demand and supply. This paper implements the C-Q proposal in the P-W context. It uses a unique new data set of time series for plans for the major macroeconomic variables in Poland and other CPEs. The overall framework is applicable to any large organization which plans economic variables.

The Theory and Measurement of Macroeconomic Disequilibrium in Centrally Planned Economies

“…The line of research surveyed here was originally motivated by scepticism towards the conventional wisdom that the household Skurski, 1972, andTurcan, 1977). We may be is much which is stimulating in this ned currency from the worsening ia in some CPEs (especially Poland) it distorts the facts over the whole I have set out the theoretical innovations in Fortes (1981Fortes ( . 1983).…”

Money and the consumption goods market in China

“…Portes and Winter (1980 hereafter P-W) estimated a 'canonical' disequilibrium model (Quandt, 1982) without wishing to defend them with excessive vigour. Note that although plan variables play an important role in our analysis, we do not have independent data on plans in China, like those used by Portes et al (1987) for Poland, so we cannot add a plan adjustment equation like theirs, and we must use a constructed series for plan variables as in the original P-W paper.…”

“…All estimated coefficients satisfy the a priori sign restrictions (and lie in prescribed intervals, where required), and they are quite well determined. In each case, we report estimates with and without the constraint p1 = 1; this was imposed by Portes et al (1987) but not by Burkett. We also report estimates with the constraint a3 = I, imposed by Burkett but not by Portes et al; and with both coefficients constrained.…”

The Conflict Between Equilibrium and Disequilibrium Theories: The Case of the U.S. Labor Market

“…Therefore, we performed some stochastic simula tions. (See Portes, Quandt, Winter and Yeo, 1987.) The simulation 50 The Conflict Between Equilibrium and Disequilibrium Theories strategy was to solve for the jointly determined variables after we added to each structural equation a normal deviate with the same variance as was estimated for that equation.…”