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Stagflation and Shortageflation: A Comparative Approach


  • Kolodko, Grzegorz W
  • McMahon, Walter W


This paper compares inflation and unemployment in western mark et economies with the repressed inflation and persistent shortages co mmon in centrally-planned economies. Stagflation and shortageflation, the latter defined as inflation accompanied by shortages, have much in common, as is developed here using a similar theoretical structure Measures of stagflation for the western economies and shortageflati on for the eastern European socialist countries suggest a new "miser y index" that is largest for Italy and Poland and smallest for West and East Germany. Furthermore, where relative prices fail to reflect relative scarcities, queuing, gluts, and other allocative inefficienc ies can slow growth. Copyright 1987 by WWZ and Helbing & Lichtenhahn Verlag AG

Suggested Citation

  • Kolodko, Grzegorz W & McMahon, Walter W, 1987. "Stagflation and Shortageflation: A Comparative Approach," Kyklos, Wiley Blackwell, vol. 40(2), pages 176-197.
  • Handle: RePEc:bla:kyklos:v:40:y:1987:i:2:p:176-97

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    References listed on IDEAS

    1. Christian Grund & Niels Westergaard-Nielsen, 2008. "The Dispersion of Employees' Wage Increases and Firm Performance," ILR Review, Cornell University, ILR School, vol. 61(4), pages 485-501, July.
    2. Benno Torgler & Sascha L. Schmidt & Bruno S. Frey, 2006. "Relative Income Position And Performance: An Empirical Panel Analysis," IEW - Working Papers 268, Institute for Empirical Research in Economics - University of Zurich.
    3. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, January.
    4. Freeman, Richard B. & Katz, Lawrence F. (ed.), 1995. "Differences and Changes in Wage Structures," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226261607.
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    Cited by:

    1. Sébastien Charles & Jonathan Marie, 2016. "Hyperinflation bulgare de 1997 : transition, fragilité bancaire et change," CEPN Working Papers 2016-13, Centre d'Economie de l'Université de Paris Nord.
    2. Kolodko, Grzegorz W., 2010. "The Great Transformation 1989-2029: Could It Have Been Better? Will It Be Better?," WIDER Working Paper Series 040, World Institute for Development Economic Research (UNU-WIDER).
    3. Kazimierz Stanczak, 1992. "Price Controls, Inflation, and Welfare in the Steady-State," UCLA Economics Working Papers 684, UCLA Department of Economics.
    4. János Kornai & Collegium BudapÈst, 1995. "Eliminating the shortage economy: a general analysis and examination of the dÈvelopments in Hungary: Part," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 3(2), pages 149-168, June.
    5. Kolodko, Grzegorz W., 2009. "A Two-thirds Rate of Success: Polish Transformation and Economic Development, 1989-2008," WIDER Working Paper Series 014, World Institute for Development Economic Research (UNU-WIDER).
    6. Kazimierz Stanczak, 1992. "A Note on the Benefits of Inflation in the Economies with Price Controls and the Cash-In-Advance Black Markets," UCLA Economics Working Papers 665, UCLA Department of Economics.
    7. Coricelli, Fabrizio & Rocha, Roberto de Rezende, 1991. "Stabilization programs in Eastern Europe : a comparative analysis of the Polish and Yugoslav programs of 1990," Policy Research Working Paper Series 732, The World Bank.

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