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Featured researches published by David M. Kemme.


Journal of Comparative Economics | 1984

The Polish economic collapse: Contributing factors and economic costs

David M. Kemme; Keith Crane

Abstract The rapid expansion of industrial output in Poland during the 1970s came to an abrupt halt during the latter part of the decade. This paper examines the factors contributing to the economic collapse and measures the economic costs in terms of foregone output. The basic results indicate that, although a decline in hard-currency imports and labor-hours worked were substantial contributing factors, most of the decline in output is accounted for by factors such as planning, managerial difficulties, or political unrest. In addition the gap between actual and potential industrial output reached more than 35%.


Economic Systems | 2006

Real exchange rate misalignment: Prelude to crisis?

David M. Kemme; Saktinil Roy

A model of the long run equilibrium real exchange rate based upon macroeconomic fundamentals is employed to calculate real exchange rate misalignments for Poland and Russia during the 1990s using the Beveridge and Nelson (1981) decomposition of macrofundamentals into transitory and permanent components. Short run movements of the real exchange rate are estimated with ARIMA and GARCH error correction specifications. The different nominal exchange rate regimes of the two countries generate different levels of misalignment and different responses to exogenous shocks. The average misalignment in Russia is substantially greater than that in Poland, indicating incipient pressures to devalue the ruble immediately preceding the August 1998 crisis. The half life of an exogenous shock is found to be much shorter for Poland than for Russia in the pre-crisis period. Dynamic forecasts indicate that the movements of the real exchange rate in the post-crisis period are significantly different from those in the pre-crisis period. Thus, the currency crisis in Russia could not be anticipated with the movements of the real exchange rate estimated with the macroeconomic fundamentals.


Southern Economic Journal | 2012

Did the Recent Housing Boom Signal the Global Financial Crisis

David M. Kemme; Saktinil Roy

Shillers (2005) prediction of the current global crisis followed from two key observations: (i) the recent housing booms in the United States and other advanced countries were not explained by economic fundamentals; and (ii) historically similar financial booms eventually collapsed, leading to recession. This article provides an empirical framework linking Shillers (2005) observations and crisis prediction. We utilize vector error correction models and panel probit and logit models to show that tracking a single variable, real house prices, was sufficient to predict the current global crisis.


Journal of International Money and Finance | 2004

Using Extraneous Information to Analyze Monetary Policy in Transition Economies

William T. Gavin; David M. Kemme

Empirical macroeconomics is plagued by small sample size and large idiosyncratic variation. This problem is especially severe in the case of the transition economies. We utilize a mixed-estimation method incorporating prior information from OECD country data to estimate the parameters of a reduced-form transition economy model. An exactly identified structural VAR model is constructed to analyze monetary policy in the transition economies. The OECD information increases the precision of the impulse response functions in the transition economies. The method provides a systematic way to analyze monetary policy in the transition economies where data availability is limited.


Journal of Comparative Economics | 1987

Productivity growth in polish industry

David M. Kemme

Abstract Polish economists have long emphasized the need to increase factor productivity and enterprise efficiency to shift from an extensive pattern of development. Both individual and joint factor productivity at the industrial branch level during the 1960–1977 period are examined. Several industrial branches experienced an increase in the rate of growth of joint factor productivity during the mid-1970s. It also appears that co-production and licensing agreements have contributed to these increases whereas greater than average growth rates of gross fixed capital had little impact.


Europe-Asia Studies | 1989

The chronic shortage model of centrally planned economies

David M. Kemme

(1989). The chronic shortage model of centrally planned economies. Soviet Studies: Vol. 41, No. 3, pp. 345-364.


Archive | 1989

The chronic excess demand hypothesis

David M. Kemme

In modelling the macroeconomic phenomenon of centrally planned economies (CPEs)1 economists are sharply divided on whether or not chronic shortage is a pervasive and persistent phenomenon at the macroeconomic level. One approach, the so-called chronic shortage or chronic excess demand model, essentially assumes that the demand for goods and services continually outstrips supply, not only for certain individual goods but also in the aggregate. Chronic excess demand is a maintained hypothesis in the majority of these models. The second approach, that of the disequilibrium macroeconometric model, generally makes no assumption concerning the existence of disequilibrium but attempts to detect and measure it if found.2 As a result of the different underlying assumptions and methodologies, there is confusion and disagreement over the existence and significance of shortages in CPEs. Further, the issue of macroeconomic disequilibrium in CPEs (excess aggregate demand coupled with forced savings, in particular), its existence and significance, has often inappropriately been viewed as equivalent to the notion of chronic shortage.3


Archive | 2009

Foreign Direct Investment and Export Performance in Emerging Economies: Evidence from Indian IT Firms

David M. Kemme; Deepraj Mukherjee; Alex Nikolsko‐Rzhevskyy

The effects of FDI on export behavior of both recipients and non-recipient competing firms in the same sector often guides economic development policy. We estimate a Logit model of the probability of export and Pooled Tobit and Fixed and Random Effects Tobit models of the volume of exports using a large sample of Indian Information Technology firms in 2000-2006 that focus on the role of FDI. For FDI recipients the probability of exporting and the volume of exports is greater. In addition, there is clear evidence of a spillover of the effects of FDI to non-recipient firms as their probability of exporting also increase. In a random effects Tobit model spillover also exists for the volume of exports.


Economic Systems | 2002

Liberalization, entry and product quality in transition economies

Pinaki Bose; David M. Kemme

Abstract We model the effect of liberalization on product quality and industrial activity in transition economies. As barriers to entry are reduced, entry costs fall. This leads to an increase in the proportion of low quality producers in the market. The decrease in the expected quality can have adverse effects on consumer demand for the domestic product. The analysis suggests a demand side explanation of the observed restructuring and decline in output in sectors exposed to Western competition during transition.


Empirical Economics | 1984

Discriminating among alternative production functions in Polish industry

David M. Kemme

Large scale econometric models for both market-type and socialist centrally planned economies generally specify production relationships in the form of an aggregate production function. This paper addresses the problem of specifying the functional form of the production function for a socialist centrally planned economy: Poland. Three production functions, Cobb-Douglas, CES and VES, are estimated and a non-nested test for functional form is performed using a pooled cross section-time series regression technique. The estimates of the Cobb-Douglas specification are slightly superior to those of the CES and VES specifications, but the latter provide important detail for historical analysis and interesting implications for growth.

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King Banaian

St. Cloud State University

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