Reform and pricing in the CMEA

Abstract

As noted, a properly functioning price system is one of the most critical elements to be addressed in any, even modestly, comprehensive transformation of the economic mechanisms in Eastern Europe. The pricing issue needs to be tackled from the viewpoint of techniques, as distinct from its ideological or systemic setting. Such a measure would be pivotal in order to respond promptly to induced adjustments on account of various unanticipated internal or external imbalances such as those that were experienced in the early 1980s. It would be even more paramount in formulating an autonomous, positive adjustment program with a view towards reversing flagging output performance and strengthening the PE’s adjustment mechanisms in order better to be prepared to counter any further disruptions that may emanate from domestic and especially from external imbalances caused by transitory or fundamental diseq- uilibria in the world economy, as advocated in Chapter 2.¹. Regarding levels and movements of WMPs, there is little that the PEs can do, given their comparatively small share in world trade,² beyond factoring movements in WMPs into the domestic decision-making processes according to prevailing precepts on the desired degree of price autonomy.