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Disequilibrium modelling of consumption in the centrally planned economy

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Models of Disequilibrium and Shortage in Centrally Planned Economies

Part of the book series: International Studies in Economic Modelling ((ISIM))

Abstract

Consumption market modelling is, without doubt, the best developed area of disequilibrium analysis of centrally planned economies (CPEs). There are many more papers that estimate unbalanced consumption demand/supply equations and excess demand than there are studies of other sectors of a planned economy which frequently operate in a disequilibrium state, such as labour or investment. This special attention devoted to the consumer goods market by econometric modellers can be attributed to several factors. First, consumer markets in CPEs provide clear and ample evidence of disequilibrium, such as queues, formal or informal rationing, waiting lists, forced substitution, forced savings, etc. This suggests that the traditional equilibrium modelling is not of great use, especially for some chronically unbalanced markets like housing and meat. Second, statistical data for consumption analysis are relatively abundant, and of good quality, by CPE standards (but see section 11.4 for an assessment of the completeness and bias of consumption data). Finally, the practical importance of thorough empirical analysis of consumption (which includes the disequilibrium approach) cannot be overestimated. If decision-makers knew the extent to which demand exceeded or fell below the actual consumption level, then they could more easily develop a realistic policy of dealing with the problems of excess demand or supply. Given this, there always has been a strong demand for realistic information concerning imbalance in the consumption markets.

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Authors
  1. Wojciech Charemza
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Editors and Affiliations

  1. Centre for Russian and East European Studies, University of Birmingham, UK

    Christopher Davis

  2. Department of Economics, University of Leicester, UK

    Wojciech Charemza

  3. University of Gdansk, Poland

    Wojciech Charemza

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Charemza, W. (1989). Disequilibrium modelling of consumption in the centrally planned economy. In: Davis, C., Charemza, W. (eds) Models of Disequilibrium and Shortage in Centrally Planned Economies. International Studies in Economic Modelling. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-0823-9_11

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  • DOI: https://doi.org/10.1007/978-94-009-0823-9_11

  • Publisher Name: Springer, Dordrecht

  • Print ISBN: 978-94-010-6856-7

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