ABSTRACT
Computable general equilibrium models have modified, in order to take account of the effects of risk and uncertainty in production decisions. Such modified models have been applied to the present situation of two East European countries, Poland and Hungary. In that case, the situation of the Polish and Hungarian economies is so bad that the resource transfer between agriculture and non-agriculture is difficult, resulting in an increase of agricultural production. The predicted growth path of consumption within the economy is considerably influenced by risk. Because risk takes place in time, it is practically impossible to set up a risk model without dynamic considerations. The general equilibrium models are based on social accounting matrices (SAMs) for each country. In the Hungarian case, a complication arose from the fact that the SAM did not indicate anything about the origins of savings.
