Switching Regression Model of Exports: Poland. 1989-1991

This paper considers the problem of econometric modeling of the East European Economy in transition. The description of the transition process in the Polish economy given in the paper suggests that one can distinguish two points of view on the modeling of the objects under consideration. The first focuses on the stochastic nature of changes. The second assumes the existence of (at least) two stable regimes which might be active simultaneously. The switching regression model can be used in the second case. This study is an attempt to apply the switching regression model (model with deterministic switching, estimated by method D) to the modeling of structural changes in Polish exports in 1989-91. Copyright 1993 by Kluwer Academic Publishers