Abstract
The paper provides a systematic analysis of the properties of large econometric macro models built for the Centrally Planned economies of the '70s and '80s. A specific typology of macro models is introduced, distinguishing between the demand and quasi-demand determined systems on the one hand and the supply and quasi-supply determined systems on the other, and also between complete and incomplete models specifying only one side of economic activities (i.e. generating either demand or supply). It is shown that, under the command type economy, the incomplete, fully supply determined systems prevailed, generating production and showing its allocation. The economic reforms of the '80s, which aimed at a slow transition towards market economies, brought about a tendency towards constructing complete quasi-supply determined systems (especially for Poland and the CSRS). Since, in principle, they were built for shortage economies, the model builders had to allow for unobservables (final and intermediate demand, capacity utilization) and, on the other hand, for an increasing role of the financial phenomena (including prices) and financial policy instruments. A summary of the applications of macro models in forecasting and policy simulations is provided and new tendencies associated with regaining economic equilibria and approaching the market mechanisms emerging in the period of transition are shown.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Bagrinowskij, K.A., Rimaszewskaja, N.M. and Szewjakow, A.J., (1984), ‘Imatacjonnaja sistema modelej soglasowanija pokazatelej proizwodstwa i urownija źizni naselenija’ (A system of simulation models aimed at balancing the production and level of living characteristics), Ekonomika i Matematiczeskije Metody 20, 510–518.
Barro, R.J. and Grossman, H.I., (1974), ‘Suppressed inflation and the supply multiplier’, Review of Economic Studies 41, 87–104.
Charemza, W. and Quandt, R. (1982), ‘Models and estimation of disequilibrium for centrally planned economies’, Review of Economic Studies 49, 109–116.
Charemza, W. and Gronicki, M. (1985), Ekonometryczna Analiza Nierównowagi Gospodarki Polski (An Econometric Analysis of Disequilibria for the Polish Economy), Warszawa, PWN.
Czyźewski, B., Dębski, W. and Welfe, W., (1976), Dynamic Simulations Based on Revised W-1 Model and the Model W-3 of the Polish Economy, Łódź, Prace IEiS UŁ, pp. 26.
Davis, C. and Charemza, W. (eds.) (1989), Models of Disequilibrium and Shortage in Centrally Planned Economies, London, New York, Chapman and Hall.
Dębski, W. (1987), Ekonometryczne Modele Dochodów Osobistych Ludności Polski (Econometric Models of Personal Incomes for Poland), Warszawa, PWE.
Dlouhy, V. (1984), ‘Macroeconomic disequilibrium model of centrally planned economy: some remarks and alternative specifications’, Ekonomicko-Matematicky Obzor 20, 374–387.
Dlouhy, V. (1989), ‘Disequilibrium models of the Czechoslovak economy’, in C. Davis and W. Charemza (eds.), Models of Disequilibrium and Shortage in Centrally Planned Economies, London, New York, Chapman and Hall.
Green, D and Higgins, C. (1977), SOVMOD I: A Macroeconomic Model of the Soviet Union, New York, Academic Press.
Hulyak, K. (1989), ‘Macroeconometric disequilibrium models of Hungary’, in C. Davis and W. Charemza (eds.), Models of Disequilibrium and Shortage in Centrally Planned Economies, London, New York, Chapman and Hall.
Jaremienko, J. (ed.) (1984), Modelirovanije Miezolraslievych Vzaimodejstvij (Modelling of Input-Output Interactions), Moskva, Nauka.
Juszczak, W. (1987), The W7S82 Model of the Polish Economy, Łódź, Prace IEiS UŁ, 58.
Juszczak, W. and Welfe, W. (1983), A Conditional Forecast for Development of the Polish Economy in the Period 1983–1985 (Forecast: June '83), Łódź, Prace IEiS UŁ, pp. 44.
Kalecki, M. (1963), Zarys Teorii Wzrostv Gospodarki Socjalistycznej (On the Theory of Growth of the Socialist Economy), Warszawa, PWN.
Kornai, J. (1980), Economics of Shortage, Amsterdam, North Holland.
Kornai, J. (1982), Growth, Shortage and Efficiency, Macrodynamic Model of the Socialist Economy, Oxford, Basil Blackwell.
Lackó, M. (1989), ‘Sectoral shortage models in Hungary’, in C. Davis and W. Charemza (eds.), Models of Disequilibrium and Shortage in Centrally Planned Economies, London, New York, Chapman and Hall.
Malinvaud, E. (1977), The Theory of Unemployment Reconsidered, Oxford, Basic Blackwell.
Maciejewski, W. (1976), Zastosowanie Ekonometrycznych Modeli Rozwoju Gospodarki Narodowej (Applications of the Econometric Models of the National Economy Development), Warszawa, PWE.
Maciejewski, W. (1980), Ekonometria Stosowana, Analiza Porównawcza. (Applied Econometrics. A Comparative Analysis), Warszawa, PWE.
Muellbauer, J. and Portes, R. (1978), ‘Macroeconomic models with quantity rationing’, Economic Journal 88, 788–821.
Portes, R. and Winter, D. (1980), ‘Disequilibrium estimates for consumption goods markets in centrally planned economies’, Review of Economic Studies 47, 137–159.
Portes, R., Quandt, R.E., Winter, D. and Yeo, S. (1987), ‘Macroeconomic planning and disequilibrium: estimates for Poland, 1955–1980’, Econometrica 55, 19–41.
Romański, J. and Welfe, W. (1989), ‘New minimodel of the Polish economy under disequilibrium. Revised, updated version’, paper presented to the ESEM89', Munich, Łódź-Toruń.
Sneessens, H. (1981), Theory and Estimation of Macroeconomic Rationing Models, Berlin, Springer Verlag.
Štrauch, D. (1985), ‘Main features of the macroeconometric model of the Czechoslovak economy (Version CEM-3.2)’, paper presented to the 12th International Conference ‘Macromodels’ '85, Szczyrk-Bila, in W. Welfe, P. Tomczyk (eds.), Problems of Building and Estimation of Large Econometric Models (Part A), Proceeding of Macromodels '85, Łódź, Acta Universitatis Lodziensis, Folia Oeconomica, 102.
Suchecki, B. and Welfe, A. (1988), Popyi i Rynek w Warunkach Nierównowagi (Demand and Market in a State of Disequilibrium), Warszawa, PWE.
Šujan, I. (1986), ‘Econometric models of Czechoslovakia. A survey, in W. Milo and M. Miszczynski (eds.), Macromodels of Forecasts of National Economy, Proceedings of Models and Forecasts '83 and Macromodels '83, Warszawa-Łódź, PWN.
Šujan, I., (1990), ‘Použitie ekonometrickych modelov v makroenomickych analyzach a prognozach-skusenosti VUSEI-AR’ (The application of econometric models in macroeconomic analyses and forecasts-experience gained at VUSEI-AR), Informacne Systemy 25–47.
Šujan, I. and Štrauch, D. (1987), ‘Ekonometricky model reprodukčného procesu ČSSR (Econometric model of process of reproduction for the CSSR)’, Ekonomicko-matematicky Obzor 23, 1–24.
Šujan, I. and Štrauch, D. (1989), ‘Agregátny nerovnovázny model ekónomiky ČSSR’, (Aggregate disequilibrium model for the CSSR economy), Ekonomicko-matematicky Obzor 25, 1–18.
Szakolczai, G., Marjanek, K. and Sisak-Fekete, Z. (1985), ‘Adaption of the Hungarian economy to change on the world markets. An analysis based on econometric model’, paper presented to the ES 5th World Congress, Cambridge, Mass.
Vilares, J.M. (1986), Structural Change in Macroeconometric Models, Theory and Estimation, Dordrecht, Martinus Nijhoff Publ.
Welfe, A. (1985), ‘Analiza popytu w warunkach nierównowagi’ (Demand analysis in conditions of disequilibrium), Ekonomista 1045–1064.
Welfe, A. (1986), ‘The system of demand equations in a state of disequilibrium’, Collaborative Papers, CP 85-35, Laxenburg, IIASA.
Welfe, A. (1986) ‘Intensity of disequilibrium and changes in inventories’, Collaborative Papers, CP 86-7, Laxenburg, IIASA.
Welfe, A. (1989), ‘Savings and consumption in the centrally planned economy: a disequilibrium approach’, in C. Davis and W. Charemza (eds.), Models of Disequilibrium and Shortage in Centrally Planned Economies, London, New York, Chapman and Hall.
Welfe, A. (1990), ‘Ekonometryczny model płac przeciętnych w sferze produkcji materialnej w polskiej gospodarce’ (Econometric model of wages in material production sector of the Polish economy), Przeglad Statystyczny 37, 47–61.
Welfe, W. (1973), A Medium-Term Econometric Model of the Polish Economy, Łódź, Prace IEiS UŁ.
Welfe, W. (1983), ‘Models of the socialist economy’, in L.R. Klein (ed.), Lectures in Econometrics, Amsterdam, New York, North-Holland.
Welfe, W. (1985a), ‘Model W-5 the Polish economy. General assumptions and first empirical results’, paper presented to the European Meeting of the Econometric Society, Pisa 1983, Netherlands Economic Institute, series: Foundations of Empirical Economic Research, 2.
Welfe, W. (1985b), ‘Möglichkeiten und Probleme der ökonometrischen Modellierung sozialisticher volkswirtschaften: das Modell W-5 der polnischen Wirtschaft’, Mitteilungen, Rheinisch-Westfaelisches Institut fuer Wirtschaftsforschung 36, 1–21.
Welfe, W. (1985c), Econometric Macromodels of Unbalanced Growth, Łódź, Prace IEiS UŁ, 52.
Welfe, W. (1986a), ‘Model W-5 of the Polish economy: general assumptions and the first empirical results’, revised version of (1985a) paper, in W. Welfe and W. Juszczak (eds.), Problems of Building and Estimation of Large Econometric Models, Łódź, Acta Universitatis Lodziensis, Folia Economica, 54, Uniwersytet Łódzki.
Welfe, W. (1986b), ‘The econometric models of the Polish economy’, in W. Milo and M. Miszczynski (eds.), Macromodels and Forecasts of National Economy, Proceedings of Models and Forecasts' 83 and Macromodels' 83, Warszawa-Łódź, PWN.
Welfe, W. (1987a), ‘New versions of W-models for Poland. Patterns of constrained growth and mixed government policies under economic reform’, in W. Welfe and K. Markowski (eds.), Models and Forecasts '84, Wroclaw, Ossolineum.
Welfe, W. (1987b), Outlook for the Polish Economy 1987–1992, Łódź, Prace IEiS UŁ, pp. 59.
Welfe, W. (1988a), ‘Alternatives of economic development of Poland 1986–1990 (simulation study)’, paper presented at the XI International conference ‘Models and Forecasts ’88, Budapest, Materialy IEiS, 1, Discussion Papers, Łódź.
Welfe, W. (1988b), ‘Econometric models of the centrally planned economies in the state of disequilibrium’, Economicko-Matematicky Obzor 24, 121–134.
Welfe, W. (1989a), ‘Macroeconomic disequilibrium models of Poland’, in C.M. Davis and W. Charemza (eds.), Models of Disequilibrium and Shortage in Centrally Planned Economies, Cambridge, Chapman and Hall.
Welfe, W. (1989b), ‘Macroeconometric disequilibrium and shortage models for the centrally planned economies’ paper presented at the Project LINK Meeting, Paris 1989, Materialy IEiS, 128, Discussion Papers, Łódź.
Welfe, W. (1990), ‘The supply multiplier. Empirical evidence for Poland’, paper presented at the Econometric Society 6th World Congress, Barcelona 1990, Materiały IEiS, 281, Discussion Papers, Łódź.
Welfe, W. (1991), ‘Econometric-macromodels transformation for the periods of transition towards market economies (Polish case)’, forthcoming.
Winiecki, J., (1985) ‘Portes ante Portas, A Critique of the revisionist interpretation of inflation under central planning’, Comparative Economic Studies 27, 25–52.
Author information
Authors and Affiliations
Additional information
This is a revised and extended version of our paper delivered at the Project LINK Meeting in Paris, 1989 (see W. Welfe 1989b), which made use of our earlier publication (W. Welfe 1988).
Rights and permissions
About this article
Cite this article
Welfe, W. Multisectoral econometric models of the centrally planned economies and the disequilibria. Economics of Planning 24, 203–226 (1991). https://doi.org/10.1007/BF00347670
Issue Date:
DOI: https://doi.org/10.1007/BF00347670