Asymmetric “Min” Condition and Estimation for Disequilibrium Markets: Comment
The fact that output is seldom limited by demand in centrally planned economies may, as Chang (1992) rightly stresses, simplify the task of modeling non-clearing markets. However, there are two grounds for skepticism about Chang's model of the market for consumption goods in China. First, his use of unadjusted output as a proxy for supply is suspect. Second, his consumption function and his disequilibrium indicator function are consistent only under restrictive and unverifiable conditions on variables determined outside of the model.
Volume (Year): 35 (1993)
Issue (Month): 3 (September)
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