Transformational Decline and Preconditions of Growth in Russia
The authors analyze the characteristics of recession, linking it with changes in economic agents' behavior after liberalization. They attach special importance to labor shifts between the "old" and the "new" sectors. Inter-sectoral shifts in Russia have been slowed down due to the practice of labor hoarding in the old sector. To explain these phenomena in the Russian economy the authors construct an equilibrium model of labor markets which assumes the existence of collectivist labor relations in the old sector. The results of their study show that both stronger personnel monitoring in enterprises with state and mixed ownership and the abolition of collectivist labor relations would have the effect of increasing labor productivity, reducing the gap between officially registered employment and actually used labor in the old sector, and leveling wage rates in the old and the new sectors. These measures might create the necessary preconditions for an upturn in the economy and long-term growth. The authors also consider a dynamic model which sees the shadow sector as concealed activities of firms working in the formal economy. Computer simulation of the model produced varying qualitative results depending on the selected parameters. The authors find that a reduction in the tax rate is crucial for increasing the official output.
|Date of creation:||10 Jul 1998|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.eercnetwork.com
|Order Information:|| Postal: EERC Research Network, Russia and CIS, 1, Mazepy Str., suite 202, Kyiv, 01010 Ukraine|
Web: https://eercnetwork.com/paper Email:
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gerard Roland & Thierry Verdier, 1997.
"Transition and the Output Fall,"
William Davidson Institute Working Papers Series
37, William Davidson Institute at the University of Michigan.
- Christof Rühl & Viatcheslav Vinogradov, 1997. "Social cohesion in economic development : employment and wages," Finnish Economic Papers, Finnish Economic Association, vol. 10(1), pages 3-19, Spring.
- Mathias Dewatripont & Eric Maskin, 1995.
"Credit and efficiency in centralized and decentralized economies,"
ULB Institutional Repository
2013/9603, ULB -- Universite Libre de Bruxelles.
- Dewatripont, M & Maskin, E, 1995. "Credit and Efficiency in Centralized and Decentralized Economies," Review of Economic Studies, Wiley Blackwell, vol. 62(4), pages 541-55, October.
- Mathias Dewatripont & Eric Maskin, 2004. "Credit and efficiency in centralized and decentralized economies," ULB Institutional Repository 2013/9605, ULB -- Universite Libre de Bruxelles.
- Stahl, Dale II & Alexeev, Michael, 1985. "The influence of black markets on a queue-rationed centrally planned economy," Journal of Economic Theory, Elsevier, vol. 35(2), pages 234-250, August.
- Dariusz K. Rosati, 1994. "Output decline during transition from plan to market: a reconsideration," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 2(4), pages 419-441, December.
- Philippe Aghion & Olivier J. Blanchard, 1994.
"On the Speed of Transition in Central Europe,"
in: NBER Macroeconomics Annual 1994, Volume 9, pages 283-330
National Bureau of Economic Research, Inc.
- Blanchard, Olivier Jean & Aghion, Philippe, 1994. "On the Speed of Transition in Central Europe," Scholarly Articles 4481322, Harvard University Department of Economics.
- Aghion, P. & Blanchard, O.J., 1993. "On the Speed of Transition in Central Europe," Working papers 93-8, Massachusetts Institute of Technology (MIT), Department of Economics.
- Chadha, Bankim & Coricelli, Fabrizio, 1994.
"Fiscal Constraints and the Speed of Transition,"
CEPR Discussion Papers
993, C.E.P.R. Discussion Papers.
- Polterovich, Victor, 1993. "Rationing, Queues, and Black Markets," Econometrica, Econometric Society, vol. 61(1), pages 1-28, January.
- Matveenko, Vladimir, 1995. "Development with positive externalities: The case of the Russian economy," Journal of Policy Modeling, Elsevier, vol. 17(3), pages 207-221, June.
- Kornai Janos, 1994. "Transformational Recession: The Main Causes," Journal of Comparative Economics, Elsevier, vol. 19(1), pages 39-63, August.
- Brada, Josef C & King, Arthur E, 1992. " Is There a J-Curve for the Economic Transition from Socialism to Capitalism?," Economic Change and Restructuring, Springer, vol. 25(1), pages 37-53.
- Andrew Atkeson & Patrick Kehoe, 1997. "Industry Evolution and Transition: A Neoclassical Benchmark," NBER Working Papers 6005, National Bureau of Economic Research, Inc.
- Kornai, J., 1993. "Transformational Recession; A General Phenomenon Examined Through the Example of Hangary's Development," Harvard Institute of Economic Research Working Papers 1648, Harvard - Institute of Economic Research.
- GINSBURGH, V. & MICHEL, Ph. & PADOA SCHIOPPA, F., .
"Macroeconomic policy in the presence of an irregular sector,"
CORE Discussion Papers RP
613, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Victor Ginsburgh & Philippe Michel & Fiorella Padoa-Schioppa & Pierre Pestieau, 1985. "Macroeconomic policy in the presence of an irregular sector," ULB Institutional Repository 2013/1919, ULB -- Universite Libre de Bruxelles.
- Victor Ginsburgh & Philippe Michel & Fiorella Padoa-Schioppa & Pierre Pestieau, 1987. "Macroeconomic policy in the presence of an irregular sector," ULB Institutional Repository 2013/3323, ULB -- Universite Libre de Bruxelles.
- Guillermo Calvo & Fabrizio Coricelli, 1992.
"Output Collapse in Eastern Europe: The Role of Credit,"
IMF Working Papers
92/64, International Monetary Fund.
- Guillermo A. Calvo & Fabrizio Coricelli, 1993. "Output Collapse in Eastern Europe: The Role of Credit," IMF Staff Papers, Palgrave Macmillan, vol. 40(1), pages 32-52, March.
- Wellisz, Stanislaw & Findlay, Ronald, 1986. "Central Planning and the 'Second Economy' in Soviet-Type Systems," Economic Journal, Royal Economic Society, vol. 96(383), pages 646-58, September.
- Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
- David Lipton & Jeffrey D. Sachs, 1990. "Creating a Market Economy in Eastern Europe: The Case of Poland," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 75-148.
- Dixit, Avinash & Rob, Rafael, 1994. "Risk-sharing, adjustment, and trade," Journal of International Economics, Elsevier, vol. 36(3-4), pages 263-287, May.
- Philippe Aghion & Olivier Jean Blanchard, 1994. "On the Speed of Transition Central Europe," NBER Working Papers 4736, National Bureau of Economic Research, Inc.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Dunne, Timothy & Roberts, Mark J & Samuelson, Larry, 1989.
"The Growth and Failure of U.S. Manufacturing Plants,"
The Quarterly Journal of Economics,
MIT Press, vol. 104(4), pages 671-98, November.
- Dunne, T. & Roberts, M.J. & Samuelson, L., 1988. "The Growth And Failure Of U.S. Manufacturing Plants," Papers 1-87-5, Pennsylvania State - Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:eer:wpalle:98-03e. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anton Pashchenko)
If references are entirely missing, you can add them using this form.