Elimination of Structural Distortions in the Transformation Process
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Publication date: 2003-10-25
GNPJE 2003;187(10):21–42
In the period of its transition, the Polish economy inherited certain structural distortions existing in the former system. This article presents an analysis of two such distortions: unutilised capacities and hidden unemployment. Unutilised capacities are one of the basic categories of the Keynesian theory. Keynes and Kalecki, who authored this theory, presented unutilised capacities homogenously, without analysing their structure. A comparison of their relative size in Poland and in the OECD countries allows to propose a hypothesis implying a dual nature of unutilised capacities in Poland. They can be divided into efficient and inefficient ones, the latter adding excessively to original costs of enterprises. Their elimination is possible by means of rejuvenation of productive assets financed with depreciation allowances, provided that they are not spent on non-investment purposes. The author attempts to estimate the relative scope of inefficient capacities and the length of the implementation period of the mentioned operation. The Domar growth model is analysed in the article for two reasons: 1. explanation of the origins of incomplete capacity utilisation in the capitalist economy; 2. estimation of indices of employment growth and unemployment decline. The final part of the article is devoted to that issue in reference to Poland.