Strain and Inflation-Unemployment Relationship in Transitional Economies: A theoretical and empirical investigation
Standard economic theory tells that a command system, like the former eastern economies, allocates resources poorly due to the impossibility of accurate 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 possible 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 tries to conceptualise the fact that the dynamics of unemployment and inflation are correlated not in a classical sense but in a very complicated mode that suggests the occurrence of some attractors when certain slow parameters are evolving in the neighbourhood of special threshold-values. The start is made with simple models that are based on empirical data and can show to us the traces to discover the steps of transition in eastern economies on the inflation-unemployment relationship space. Then, using economic theory combined with non-linear modelling more refined information is extracted from the statistical standardised data for to evaluate other faces of the eastern transition.
|Date of creation:||Nov 2008|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 004 021 3188148
Fax: 004 021 3188148
Web page: http://www.ipe.ro/
More information through EDIRC
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.:
- Daianu, Daniel & Albu, Lucian-Liviu, 1996.
"Strain and the inflation - unemployment relationship: a conceptual and empirical investigation,"
14017, University Library of Munich, Germany.
- Daniel Daianu & Lucian-Liviu Albu, . "Strain and the Inflation - Unemployment Relationship: A Conceptual and Empirical Investigation," Ace Project Memoranda 96/15, Department of Economics, University of Leicester.
- Santomero, Anthony M & Seater, John J, 1978. "The Inflation-Unemployment Trade-off: A Critique of the Literature," Journal of Economic Literature, American Economic Association, vol. 16(2), pages 499-544, June.
- Fischer, Edwin O & Jammernegg, Werner, 1986. "Empirical Investigation of a Catastrophe Theory Extension of the Phillips Curve," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 9-17, February.
- B. Mandelbrot, 1972. "Statistical Methodology for Nonperiodic Cycles: From the Covariance To R/S Analysis," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 1, number 3, pages 259-290 National Bureau of Economic Research, Inc.
- Soliman, A. S., 1996. "Transitions from stable equilibrium points to periodic cycles to chaos in a phillips curve system," Journal of Macroeconomics, Elsevier, vol. 18(1), pages 139-153.
When requesting a correction, please mention this item's handle: RePEc:rjr:wpiecf:081103. 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: (Corina Saman)
If references are entirely missing, you can add them using this form.