This monograph presents a detailed examination of a variety of issues pertain­ ing to pricing in the context of the Council for Mutual Economic Assistance (CMEA), a designation that I much prefer over Comecon. It situates itself within the contours of the pricing problematique that I have recently analyzed as one component of the broader aspects of monetary cooperation, essentially among the Eastern European countries (see Chapters 4 and 5 of Brabant, 1987). The suggestion that I elaborate in detail on the circumstances under which prices for regional trade within the framework of the CMEA are determined was 'strongly' urged by an anonymous referee of Brabant (1986b) and Josef Brada, the editor of Journal of Comparative Economics. Both evidently felt that the comparatively commodity-specific pricing issues that I have presented piecemeal in half a dozen articles or so since 1984 had remained too narrow, largely configured as they inevitably were by the empirical findings of exercises applied to a small number of commodities, as discussed here in Chapter 7. Under the circumstances, I saw little point in attempting to set forth these in­ tricate issues in a comprehensive framework. Perhaps the central motivation was that many of the regional pricing issues in the CMEA have, by and large, remained quite obscure and intractable. They might be crucial determinants in some isolated cases, as I was trying to verify.

Inhalt

1. The place of prices in a socialist economy.- 2. Objectives of the study.- 3. Institutional background.- 4. Outline of the monograph.- I: Value and Price in Theory and Economic Policy.- 1: Value and price theory in Eastern Europe.- 1. Overall backdrop to pricing in a PE.- 2. On the concept of economic law and the role of ideology.- 3. On the law of value and price theory.- 4. The law of value and the foreign trade of PEs.- 5. Economic rationality in a socialist economy.- 6. On price theory and price policy in a PE.- 2: Prices and price policies in Eastern Europe.- 1. Multiple domestic price regimes in a generic PE.- 1. Price types.- 2. The determination of wholesale prices.- 3. Consumer prices.- 2. The relationship between domestic and foreign trade prices.- 3. Key determinants of the price tiers in a CPE.- 4. Economic reforms and the role of prices in an MPE.- 5. Domestic price formation in perspective.- 3: Price behavior prior to the Bucharest principles.- 1. The setting and rationale of intra-CMEA prices.- 2. On the emergence of an own price system and price categories.- 3. Current and stop prices, 1945-1953.- 1. Current prices until about 1949.- 2. Lagged average WMPs until 1950.- 3. Stop prices until 1953.- 4. Modified stop prices, 1954-1958.- 1. Marginal adaptations, 1954-1956.- 2. Special adjustments, 1957-1958.- 5. The role and function of trade prices.- 6. Towards a regional pricing regime?.- 4: The Bucharest price-formation principles.- 1. Backdrop to the Bucharest meeting.- 2. On the Bucharest principles.- 1. The fundamental principles for CMEA pricing.- 2. Modifiers of proper reference prices.- 3. Miscellaneous other principles.- 4. Actual transportation charges.- 3. A formal restatement.- 4. A brief evaluation and reference map.- II: The Practice of Regional Pricing.- 5: Applying the principles - conceptual issues.- 1. The setting of the Bucharest principles.- 2. The Bucharest principles and trade conduct.- 3. Trade negotiations and WMPs.- 1. The trading system.- 2. The documentation of WMPs.- 3. Changes in the commodity composition of trade.- 4. The peculiarities of east-west economic relations.- 5. Inertia on the part of negotiators.- 6. Time limitations.- 4. Major determinants of TRPs.- 1. Socialist planning for structural change.- 2. A socialist world market.- 3. The bilateral trading world.- 5. Towards a regional price system?.- 1. Different types of products traded in the CMEA.- 2. A morphology of separate price-formation environments.- 3. The effects of the traditional trade model and price reforms.- 6. Drawbacks of the CMEA price regime.- 1. Economic scarcity and TRPs.- 2. Price heterogeneity.- 3. Market interaction and flexibility.- 4. Regional specialization.- 5. Arbitrage.- 6. Timeliness of price signals.- 6: Modeling price behavior - the literature.- 1. A brief summary of earlier research.- 2. Price discrimination in the CMEA.- 3. The price effects of forming a customs union.- 4. On the opportunity cost of CMEA trading.- 5. On implicit trade subsidies in the CMEA.- 6. Differences between TRPs and WMPs.- 7. On the empirical relationship between TRPs, EWPs, and WMPs.- 7: Econometric applications.- 1. Empirical problems and trade statistics.- 1. Overall characteristics of Eastern European trade statistics.- 2. Informational requirements for statistical tests.- 3. On the Hungarian foreign trade statistics.- 4. On the relationship between TRPs and WMPs.- 5. On the relationship between TRPs and EWPs.- 6. On the time perspective.- 7. Export and import homogeneity.- 2. The model to be tested.- 3. The relationship between TRPs and WMPs.- 4. The relationship between TRPs and EWPs - an in-growth?.- 1. Rationale for an in-growth model.- 2. Estimates based on absolute price data.- 3. The relationships for price indices.- 5. On the question of using unit values.- 6. A summing up and directions for further work.- III: Reforming CMEA Pricing in Perspective.- 8: Reform and pricing in the CMEA.- 1. Drawbacks of the present price mechanisms.- 2. Searching for an alternative TRP regime.- 3. Economic theory and international prices.- 4. The relevance of the pre-1970 debate.- 1. Myopic proposals.- 2. Modified myopic proposals.- 3. Comprehensive reforms.- 5. Towards the elaboration of an IPS.- 6. The pricing debate and SEI.- 9: Positive economic adjustment and price reform.- 1. Structural adjustment and alternative TRP regimes.- 2. Towards an own price regime.- 3. The main characteristics of a realistic IPS.- 4. Scientific-technological Progress and an IPS.- 5. Towards a CMEA price reform.