The Theory and Measurement of Macroeconomic Disequilibrium in Centrally Planned Economies

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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 analysis of many CPE phenomena, opened up a range of possibilities for empirical investigation, and generated several important spinoffs: work of planners' behavior, 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".

Published:

• From Models of Disequilibrium and Shortage in Centrally Planned Economies,edited by C. Davis and W. Charemza, pp. 27-47. London: Chapman and Hall Ltd., 1989. ,
• Portes, Richard and Richard E. Quandt. "Macroeconomic Disequilibrium In Centrally Planned Economies: Comment," Journal of Comparative Economics, 1989, v13(4), 576-579.

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