In this book on disequilibrium, growth and labor market dynamics we take predominantly a macroeconomic perspective. We present a working model that can easily be varied in different directions in order to subsume innovations in the literature on macroeconomics, old and new, and to contribute to important currently discussed macroeconomic issues. Our working model is set up in a way that there is a close relationship between our presented dynamic models and modern macro econometric models with disequilibrium both in the labor and the goods markets. One of our objectives is, therefore, to narrow the gap between theoretical and applied structural macrodynamic model building. We hope that the book will be a useful reference for all researchers, academic teachers and practitioners of macroeconomic and macro econometric model building who are interested in economic dynamics, independently of whether they use equilibrium or disequilibrium methods in their own research. We base this hope on the fact that our approach contains a number of unique features. The emphasis on the identification and analysis of the basic feedback mechanisms at work in modern macro economies. A detailed study of the partial as well as integrated dynamic interaction between these feedback mechanisms that consti tute the interdependence of markets and sectors of the modern macro economy. The rela tionship between the macroeconomic framework of our working model and the Walrasian, Non-Walrasian and New-Keynesian reformulations of macroeconomics.

This volume is the result of a conference held at the Institute for Advanced Studies, Vienna. There is still a gap reflected both in fundamental meth odological differences and in the style of analysis between the Walrasian (and Edgeworthian) tradition of general equilibrium theory and the theo retical and policy problems raised in the framework of Keynesian and post-Keynesian macroeconomics. The conference succeeded in bringing together economic theorists working in fields ranging from abstract prob lems of mathematical equilibrium analysis to applied macroeconomic theory, and it is hoped that the present volume will contribute to bridging the above-mentioned hiatus. As organizer of the meeting and editor of its proceedings I want to thank the Institute for Advanced Studies for providing facilities and funds. I am also sincerely grateful to all my colleagues from the Institute for their generous help, in particular to Mrs Monika Herkner without whose assistance and organizational talent the conference would certainly not have been the success it in fact - in the opinion of all participants - turned out to have been. Furthermore, I wish to express my gratitude towards all participants in the meeting and contributors to the volume whose patient support of the whole enterprise proved indispensable. To Mrs Elfriede Auracher I am deeply indebted for her skillful and effective general management of the editorial work and her invaluable assistance in compiling the indexes.

Known internationally as ‘Mr. Shareholding’ economist, Li Yining has had a transformative impact on China's economic transition, most notably as an early advocate of ownership reform and in his promotion of shareholding theory. By examining the interrelationship between the government, enterprises and the market, Chinese Economy in Disequilibrium presents an in-depth discussion on the issues of resource allocation, industrial structure, institutional innovation and economic fluctuation in the current Chinese economy under the condition of disequilibrium. Credited with developing the theory of economic disequilibrium, Professor Li distinguishes two types of disequilibrium on the basis of whether or not the majority of firms in the economy are viable profit-makers. In Chinese Economy in Disequilibrium, Professor Li points out that not only has China’s economy been in a state of disequilibrium, but it also has issues with enterprises not being under budget constraint. Given the limitations of market regulation under economic disequilibrium, Professor Li advocates the reform of the enterprise system and upholds the government’s leading role in the establishment of order in the socialist commodity economy. A number of measures are also proposed with the aim of facilitating the transition of China’s economy from disequilibrium to equilibrium. The central theme is that the reform and transition are means to serve economic growth and social development, which would eventually benefit the ordinary citizens in society. Yining Li is a Professor of Economics and Emeritus Dean of Peking University’s Guanghua School of Management. He is one of China’s foremost economists, and the author of twenty books and numerous articles on a wide range of economic subjects including reform and development in China. He has received a number of prestigious awards and honours for his research. As the leading proponent of a market economy in China, Professor Li has had a tremendous influence on China’s economic reform policy over the last three decades. He has served on the Standing Committee of the National People’s Congress of China and is currently Vice-Chairman of the Economic Committee of the Chinese People’s Political Consultative Conference.

This monograph grew out of a project which was sponsored by the Swiss National Foundation ("Schweizerischer Nationalfonds") under grant no. 4. 636-0. 83. 09. Yithin this project, prediction-oriented estimation methods for the canonical econometric disequilibrium model were developed. The present monograph deals with the application of these estimation techniques to three aggregative markets of the Swiss economy. Parts of the monograph have been presented at various places: the estimation techniques described in chapter 3 at the European Meeting of the Econometric Society, Madrid 1984; the application to residential investment described in chapter 4 at a symposium on housing policy at the University of Mannheim, 1984; the empirical study on the money stock described in chapter 5 at the Symposium on Money, Banking and Insurance held at the University of Karlsruhe, 1984, as well as at a joint seminar of the University of Basle and the Bank for International Settlements (BIS), 1985; and, finally, the empirical study on the aggregate labor market described in chapter 6 at a seminar of the University of ZUrich, 1985. Comments from toe seminar participants, in particular from Palle S. Andersen (BIS) who served as a discussant, Pascal Bridel (Swiss National Bank, SNB), Franz Ettlin (SNB), and Kurt Schiltknecht (Nordfinanz-Bank, Zurich) are gratefully acknowledged, without implying any responsibility on their part. The methodological part described in chapters 2 and 3 is contributed by G. Frei and B.

This book outlines a conceptual framework within which strategizing by firms takes place in the same conditions of turbulence that are found in the real economy. The framework accomodates strategizing around issues of innovation, networks formation, entrepreneurship, extension of value chains, and other phenomena that do not fit easily into conventional equilibrium-based settings.

The centrally planned economies (CPEs) of the Soviet Union and Eastern Europe have experienced severe imbalances in domestic and external markets over the past several decades. As a result, they have been chronically afflicted by problems such as excess demand, repressed inflation, deficits of commodities, queues, waiting lists, and forced savings. Economists have responded to these phenomena by developing appropriate theoretical and empirical models of CPEs. Of particular note have been the pioneering studies of Richard Portes on disequilibrium econometric models and Janos Kornai on the shortage economy. Each approach has attracted followers who have produced numerous, innovative macro- and microeconomic models of Poland, Czechoslovakia, the German Democratic Republic, Hungary, and the USSR. These models have proved to be of considerable value in the analysis of the causes, consequences and remedies of disequilibrium phenomena. Inevitably, the new research has also generated controversies both between and within the schools of shortage and disequilibrium modelling, concerning the fundamental nature of the socialist economy, theoretical concepts and definitions, the specification of models, estimation techniques, interpretation of empirical findings, and policy recommend ations. Furthermore, the research effort has been energetic but incomplete, so many gaps exist in the field.

Different international relations theorists have studied political change, but all fall short of sufficiently integrating human reactions, feelings, and responses to change in their theories. This book adds a social psychological component to the analysis of why nations, politically organized groups, or states enter into armed conflict. The Disequilibrium, Polarization, and Crisis Model is introduced, which draws from prospect theory, realism, liberalism, and constructivism. The theory considers how humans react and respond to change in their social, political, and economic environment. Three case studies, the U.S. Civil War, the Yugoslav Wars (1991-1995), and the First World War are applied to illustrate the model’s six process stages: status quo, change creating shifts that lead to disequilibrium, realization of loss, hanging on to the old status quo, emergence of a rigid system, and risky decisions leading to violence and war.

. The organizers of the ninth symposium, which produced the current proceedings volume, were Claude Hillinger at the University of Munich, Giancarlo Gandolfo at the University of Rome "La Sapienza," A. R. Bergstrom at the University of Essex, and P. C. B. Phillips at Yale University.

Most re cent contributions to disequilibrium theory have a high level of abstraction. Empirical studies explicitly based on disequilibrium are still relatively scarce. However, empirical macro economics anticipated the theoretical development, and amalgamated classical and Keynesian elements often without a clear-cut formal base. Now a theoretical integration of neo-classical and neo-Keynesian economics seems under way. There is a renewed interest in the micro-economic foundations of macroeconomics with a special focus on the behaviour of economic agents operating in non-clearing markets. In some instances these theoretical developments offer an ex post justification for empirical macro-economic practices. Generally however, they call for new ways of empirical macro-economic model building. This study operates on the border line between empirical macro economics and theoretical disequilibrium macro-economic theory. Our interest in macro-economic disequilibrium originates from the empirical side. Foreign trade relations for several countries revealed significant pressure of demand effects. Hence, the spillover of excess demand in domestic markets to foreign markets seemed a rather general phenomenon. This fact could be explained by a theory that states that actual demand for products from domestic ftrms will gene rally and systematically differ from the ex ante demand as suggested by equilibrium analysis. This latter demand concept comes close to Clower's 'notional demand' and Patinkin's 'potential demand'.