Abstract
In the analysis of econometric models, it is common to test the n ull hypothesis of equilibrium against the disequilibrium alternat ive. This paper tests the null hypothesis of all-excess-demand-tha all observations correspond to (positive) excess demand-against the alternative that permits excess demand of either sign. The auth ors use a test due to Rogers (1984), which their Monte Carlo experime nts suggest performs well in small samples, as well as a quasi-like lihood ratio test, which is a suggestive heuristic procedure. The da ta are from the aggregate consumption goods market in Poland 1955-80, and the paper is, thus, a test of J. Kornai's assertion that chroni c shortage characterizes such CPEs. The results conclusively reject the all-excess-demand hypothesis for the Polish case, and the Rogers test promises to be of considerable practical use. Copyright 1988 by MIT Press.
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