Effective Purchasing Power in a Quantity Constrained Economy: An Estimate for the German Democratic Republic
- 1 February 1986
- journal article
- Published by JSTOR in The Review of Economics and Statistics
- Vol. 68 (1)
- https://doi.org/10.2307/1924924
Abstract
A measure of microeconomic disequilibrium for households facing both budget and quantity constraints is estimated from East German data. Using a new specification, the Flexible-Cobb-Douglas utility function, the parameters of a "German" direct utility function are estimated from West German family budgets. It is estimated that an average East Germany family in 1977 would have been willing to give up 13% of its total expenditure in order to attain its demand at official prices.Keywords
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