Price mechanisms and adequate concepts of economic policy in transitional economies

Central European countries in transition have mainly completed the first phase of transformation as they more or less successfully carried out the stabilization, systemic and microeconomic reforms, and liberalized and opened their economies. They entered the second phase of transition, the phase of progressive adjustment of their economic mechanisms to those that operate in market-developed, old European economies. The programme is important for the assessment of economic mechanisms that work in transforming countries in the second phase of transition, i.e. in the phase of joining the European Union. The basic goal of the programme is the analysis of price mechanisms in the second phase of transition and the elaboration of those instruments of economic policy that would lead to desired macroeconomic goals. The programme has following concrete aims. (1) Working out of a short-run interdependent model that enables to formalize the most likely measures of economic policy and with regard to the structure and behaviour of the economy to anticipate their outcomes. (2) Analysis of national price levels and causes of changes of relation between purchasing power parity (for the sector of households consumption) and exchange rate in countries in transition. (3) Analysis of competitiveness of countries in transition, and within the scope of research, especially analysis of national price levels as the indicator of global competitiveness of transition countries, analysis of wages and their purchasing power and analysis of relative domestic price levels of particular goods or commodity sections, which is necessary to determine the eventual comparative advantages and disadvantages of individual transition countries. (4) Analysis of changes of relations between prices of goods in transition countries in comparison with some old market economies (Austria, Italy). Such procedure would assess the price disparities in transition economies in comparison with selected base-countries. (5) Analysis of measures of economic policy and their effect (mainly on inflation) in countries in transition, especially with reference to the abolishment of price distortions.