Advanced Search
MyIDEAS: Login to save this paper or follow this series

Strain and the inflation - unemployment relationship: a conceptual and empirical investigation

Contents:

Author Info

  • Daianu, Daniel
  • Albu, Lucian-Liviu

Abstract

Economic theory tells that a command system allocates resources poorly because of the impossibility of economic calculation. Therefore, once prices are freed and start to operate at quasi-equilibrium (market-clearing) levels, the hidden inefficiencies come into the open and a massive resource reallocation would have to take place. More precisely, the issue refers to the possible and probable intensity of resource reallocation in view of constraints like the balance between exit and entry in the labour market, the size of the budget deficit and the means for its non-inflationary financing, social and political stability, etc. This paper makes an attempt to conceptualise the emergence of strain emerges an economic system when relative prices change dramatically, and explores what can be implications for stabilisation policy. The start is made with the closed economy, after which the open economy case is looked at, and a possible formalised expression of strain is suggested, The distributional struggle, as a consequence of resource reallocation, is highlighted. Some modelling and empirical analysis help in substantiating the main thesis. it is contented that the line of reasoning espoused herein can help in developing an economic explanation of shocks in economic systems.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/14017/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 14017.

as in new window
Length:
Date of creation: Oct 1996
Date of revision:
Handle: RePEc:pra:mprapa:14017

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: open economy; Phillips curve; long-run atractor; fractal dimension;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Vito Tanzi, 1993. "Fiscal Policy and the Economic Restructuring of Economies in Transition," IMF Working Papers 93/22, International Monetary Fund.
  2. Jean-Michel Grandmont, 2008. "Nonlinear Difference Equations, Bifurcations and Chaos: An Introduction," Working Papers 2008_23, Department of Economics, University of Venice "Ca' Foscari".
  3. Sachs, J.D. & Woo, W.T., 1994. "Structural Factors in the Economic Reforms of China, Eastern Europe and the Former Soviet Union," Papers, California Davis - Institute of Governmental Affairs 94-01, California Davis - Institute of Governmental Affairs.
  4. Daniel Daianu, 1994. "Inter-Enterprise Arrears in a Post-Command Economy," IMF Working Papers 94/54, International Monetary Fund.
  5. Eric V. Clifton & Mohsin S. Khan, 1993. "Interenterprise Arrears in Transforming Economies: The Case of Romania," IMF Staff Papers, Palgrave Macmillan, vol. 40(3), pages 680-696, September.
  6. Albu, Lucian-Liviu & Ivan-Ungureanu, Clementina, 1994. "Coût ou bénéfice de la transition
    [Cost or benefit of the transition]
    ," MPRA Paper 14118, University Library of Munich, Germany.
  7. Guillermo Calvo & Fabrizio Coricelli, 1992. "Output Collapse in Eastern Europe," IMF Working Papers 92/64, International Monetary Fund.
  8. Portes, Richard, 1986. "The Theory and Measurement of Macroeconomic Disequilibrium in Centrally Planned Economies," CEPR Discussion Papers, C.E.P.R. Discussion Papers 91, C.E.P.R. Discussion Papers.
  9. repec:imf:imfpdp:9309 is not listed on IDEAS
  10. Ickes, B.W. & Ryterman, R., 1992. "Inter-Enterprise Arrears and Financial Underdevelopment in Russia," Papers, Pennsylvania State - Department of Economics 9-92-6, Pennsylvania State - Department of Economics.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Albu, Lucian Liviu, 2008. "Strain and Inflation-Unemployment Relationship in Transitional Economies: A theoretical and empirical investigation," Working Papers of Institute for Economic Forecasting, Institute for Economic Forecasting 081103, Institute for Economic Forecasting.
  2. Lucian Liviu Albu, 2010. "From Standard Macroeconomics To Non-Linear Macroeconomics," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 5(1), pages 5-33, april.
  3. Albu, Lucian-Liviu, 2006. "Non-linear models: applications in economics," MPRA Paper 3100, University Library of Munich, Germany.
  4. Albu, Lucian-Liviu, 2006. "A dynamic model to estimate the long-run trends in potential GDP," MPRA Paper 3708, University Library of Munich, Germany.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:14017. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.