Inflation in the consumer goods market in Poland, 1971–82

apparent impossibility of their solution. This paper looks at the particular policy problem of inflation in the consumer goods market, in the context of the Polish economy, where inflation has grown from insignificance in the early 1970s to become comparable with rates experienced in such inflation-stricken economies as Britain, Italy and Yugoslavia, by the early 1980s, and to rival Israel by 1982. The aim of the paper is to survey Polish inflationary experience of the period 1971-82, and to discuss some possible causes. In an earlier work (Wanless, 1980, passim) the author suggested that the economic reforms of 1973 had contributed to inflationary pressure. In this paper the causes of inflationary pressure are discussed in more detail and the discussion is brought up to date to 1982. (At the time of writing, 1982 is the latest year for which comprehensive data are available.) Particular attention is paid to the money supply, and to monetary indicators of inflationary pressure. The overall approach is based on descriptive economics, and uses some standard indicators of the extent of the inflation problem. The author has been able to draw extensively on Polish statistical sources, not all of which are available to non-Polish speakers. By collecting a variety of indicators of inflation, and presenting them in this paper, the author hopes to make some modest contribution to knowledge of inflation in centrally planned economies. The data and discussion in this paper contradict two stereotyped views of inflation in CPEs which have now become fairly well-established, even though they are mutually contradictory. The first, or traditional, view is that inflationary pressure is endemic in CPEs, but results in suppressed, rather than open inflation, because of the stringency of central price control. The second or 'new view' is that centralised financial planning results in such stringent monetary control that problems of general excess demand for consumer goods and services generally do not exist in CPEs. Section I of this paper looks at these views in a little more detail and compares them with inflationary experience revealed in Polish price statistics. Section II discusses the money supply and monetary indicators of inflationary pressure. Section III sums up the lessons of recent Polish experience

Business · Commerce · Economics · Inflation (cosmology · Monetary economics · Economic and Fiscal Studies · Post-Communist Economic and Political Transition

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