Advertisement

Zeitschrift für Nationalökonomie

, Volume 41, Issue 1–2, pp 111–132 | Cite as

Price distortions in the Austrian and in the Hungarian economy

  • Gerhard Fink
Articles

Conclusions

We started this paper from the widely accepted hypothesis that there is a significant price bias in socialist economies which undervalues investment as compared with market economies, but a comparison of the deviations of linear model prices (production prices, extended production prices, cost prices, and labour value prices) from actual prices in Austria and Hungary does not support this hypothesis:

  1. 1)

    The deviations of actual aggregated prices from linear model prices of both countries are very similar (r=0.85).

    In both countries basic and food industries make profits which are smaller than average, while more dynamic industries with a higher share in new products obtain above average profits.

     
  2. 2)

    At production prices and extended production prices the relative price effect is stronger than the turnover tax effect and runs counter to it. Since this is the case in both countries it cannot be concluded that the share of investment in national income is distorted on the low side in Hungary.

     

Keywords

Market Economy High Share National Income Relative Price Production Price 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. [1]
    T. P. Alton: Economic Structure and Growth in Eastern Europe; Economic Development in Countries of Eastern Europe, Washington 1970.Google Scholar
  2. [2]
    W. J. Baumol and D. F. Bradford: Optimal Departures from Marginal Cost Pricing, American Economic Review60 (1970), pp. 265–283.Google Scholar
  3. [3]
    A. Bergson: The Real National Income of the Soviet Russia Since 1928, Cambridge 1961.Google Scholar
  4. [4]
    A. Bergson and S. Kuznets (ed.): Economic Trends in the Soviet Union, Cambridge, Mass. 1963.Google Scholar
  5. [5]
    M. Bornstein: Price Formation Models and Price Policy in Hungary, in A. Abouchar (ed.): The Socialist Price Mechanism, Durham, North Carolina 1977, pp. 231–245.Google Scholar
  6. [6]
    M. Bornstein and D. R. Fusfeld (ed.): The Soviet Economy, A Book of Readings, 3rd ed. Homewood (Ill.), 1970.Google Scholar
  7. [7]
    A. A. Brown and D. O. Walker: Hungarian Input-Output Tables: Description, Reconstruction and Price Adjustment, Indiana University, Bloomington, Working Papers No. 20, 1973.Google Scholar
  8. [8]
    A. A. Brown, O. P. Hall, and J. A. Licari: Price Adjustment of Input-Output Tables for Socialist Economies: Theory and an Empirical Technique: University of Windsor, Discussion Paper Series No. 10, Canada 1972.Google Scholar
  9. [9]
    A. A. Brown, O. P. Hall, and J. A. Licari: Price Adjustment Models for Socialist Economies: Theory and an Empirical Technique, Studies in East European and Soviet Planning, Development and Trade No. 18, 1973.Google Scholar
  10. [10]
    A. A. Brown and J. A. Licari: Price Formation Models and Economic Efficiency, in: A. Abouchar (ed.): The Socialist Price Mechanism, Durham, North Carolina 1977, pp. 184–230.Google Scholar
  11. [11]
    A. Brody: Proportions, Prices and Planning, Amsterdam 1970.Google Scholar
  12. [12]
    A. M. Costa: The Duality Properties of the Interindustry Eigenmodel. A Test Case: The Soviet Debate on the Development Strategy and the Law of Value. European Meeting of the Econometric Society, Budapest, September 1972.Google Scholar
  13. [13]
    B. Csikos-Nagy, S. Gancer, and J. Racz: Az elsö termerkrend szeru armodell, Közgazdasagi Szemle1 (1964), pp. 17–35.Google Scholar
  14. [14]
    Economic Reforms and the Revision of Wholesale Prices, Sotsialisticheskaya industriya, August 28, 1979 (RFE-RL 345/79).Google Scholar
  15. [15]
    J. Fáy and G. Fink: Ein Input-Output-Vergleich der Struktur der Bruttoproduktion nach Wirtschaftsbereichen zwischen Österreich und Ungarn, Wiener Institut für Internationale Wirtschaftsvergleiche, Forschungsbericht Nr. 35, 1976.Google Scholar
  16. [16]
    G. Fink and J. Skolka: Capital and Labour Intensity in Austrian and Hungarian Foreign Trade — an Input-Output Comparison, Jahrbuch der Wirtschaft Osteuropas9 (1980).Google Scholar
  17. [17]
    G. Heal, G. Hughes, and R. Tarling: Linear Algebra and Economics, London 1974.Google Scholar
  18. [18]
    L. Hejl, O. Kýn, and B. Sekerka: A Model for the Planning of Prices, in: C. H. Feinstein (ed.): Socialism, Capitalism and Economic Growth, Cambridge 1967, pp. 101–124.Google Scholar
  19. [19]
    L. Hejl, O. Kýn, and B. Sekerka: Model cenových typů, Rozpravy CCAV, Academia, Prague 1969.Google Scholar
  20. [20]
    O. Kýn: On International Comparisons in Artificial Prices, Wiener Institut für Internationale Wirtschaftsvergleiche, Forschungsberichte Nr. 15, 1974.Google Scholar
  21. [21]
    M. Morishima: Prices, Interest and Profits in a Dynamic Leontief System, EconometricaXXVI (1958), pp. 358–380.Google Scholar
  22. [22]
    V. Nesvera: Investitionen in Österreich und in der Tschechoslowakei, Studien über Wirtschafts- und Systemvergleiche, Band 1, Wien, New York 1971.Google Scholar
  23. [23]
    D. M. Nuti: Transformation of Labour Values into Production Prices and the Marxian Theory of Exploitation, Economista (1974), No. 1, pp. 27–48.Google Scholar
  24. [24]
    J. Osiatynski: On the Price-Bias in Comparative Analysis of Planned and Market Economies: Wiener Institut für Internationale Wirtschaftsvergleiche, Forschungsbericht Nr. 13, 1974.Google Scholar
  25. [25]
    F. Seton: The Transformation Problem, The Review of Economic Studies24 (1957), pp. 149–160.Google Scholar
  26. [26]
    D. O. Walker: Socialist Price Formation Models and the Hungarian Economy, Indiana University, Bloomington, Studies in East European and Soviet Planning, Development and Trade No. 19, 1973.Google Scholar

Copyright information

© Springer-Verlag 1981

Authors and Affiliations

  • Gerhard Fink
    • 1
  1. 1.Wiener Institut für Internationale WirtschaftsvergleicheViennaAustria

Personalised recommendations