IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/4735.html
   My bibliography  Save this paper

The Soviet Economic Decline: Historical and Republican Data

Author

Listed:
  • William Easterly
  • Stanley Fischer

Abstract

Soviet growth over 1960-89 was the worst in the world after we control for investment and human capital; the relative performance worsens over time. The declining Soviet growth rate over 1950-87 is explained by the declining marginal product of capital; the rate of TFP growth is roughly constant over that period. While the Soviet slowdown has conventionally been attributed to extensive growth (rising capital to output ratios), extensive growth is also a feature of market-oriented economies like Japan and Korea. What led to the relative Soviet decline was a low elasticity of substitution between capital and labor, which caused diminishing returns to capital to be especially acute. Tentative evidence indicates that the burden of defense spending also contributed to the Soviet debacle. Differences in growth performance between the Soviet republics are explained well by some of the same factors that figure in the empirical cross-section growth literature: initial income, human capital, population growth, and the degree of sectoral distortions.

Suggested Citation

  • William Easterly & Stanley Fischer, 1994. "The Soviet Economic Decline: Historical and Republican Data," NBER Working Papers 4735, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:4735
    Note: EFG
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w4735.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Easterly, William & Kremer, Michael & Pritchett, Lant & Summers, Lawrence H., 1993. "Good policy or good luck?: Country growth performance and temporary shocks," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 459-483, December.
    2. Landau, Daniel, 1993. "The economic impact of military expenditures," Policy Research Working Paper Series 1138, The World Bank.
    3. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 363-394, December.
    4. Desai, Padma, 1976. "The Production Function and Technical Change in Postwar Soviet Industry: A Reexamination," American Economic Review, American Economic Association, vol. 66(3), pages 372-381, June.
    5. Bergson, Abram, 1979. "Notes on the production function in Soviet postwar industrial growth," Journal of Comparative Economics, Elsevier, vol. 3(2), pages 116-126, June.
    6. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    7. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    8. Easterly, William, 1993. "How much do distortions affect growth?," Journal of Monetary Economics, Elsevier, vol. 32(2), pages 187-212, November.
    9. Robert Summers & Alan Heston, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 327-368.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fischer, Stanley & Sahay, Ratna & Vegh, Carlos, 1998. "From transition to market: Evidence and growth prospects," MPRA Paper 20615, University Library of Munich, Germany.
    2. Raiser, Martin & Schaffer, Mark & Schuchhardt, Johannes, 2004. "Benchmarking structural change in transition," Structural Change and Economic Dynamics, Elsevier, vol. 15(1), pages 47-81, March.
    3. Debdulal Mallick, 2012. "The role of capital-labour substitution in economic growth," Indian Growth and Development Review, Emerald Group Publishing, vol. 5(1), pages 89-101, April.
    4. Brainerd, Elizabeth, 2010. "Reassessing the Standard of Living in the Soviet Union: An Analysis Using Archival and Anthropometric Data," The Journal of Economic History, Cambridge University Press, vol. 70(01), pages 83-117, March.
    5. Jeanet Sinding Bentzen & Nicolai Kaarsen & Asger Moll Wingender, 2013. "The Timing of Industrialization across Countries," Discussion Papers 13-17, University of Copenhagen. Department of Economics.
    6. Kim, Byung-Yeon & Kim, Suk Jin & Lee, Keun, 2007. "Assessing the economic performance of North Korea, 1954-1989: Estimates and growth accounting analysis," Journal of Comparative Economics, Elsevier, vol. 35(3), pages 564-582, September.
    7. Brooks, Karen & Lerman, Zvi, 1995. "Restructuring of traditional farms and new land relations in Russia," Agricultural Economics, Blackwell, vol. 13(1), pages 11-25, October.
    8. Bulir, Ales, 1998. "Business Cycle in Czechoslovakia under Central Planning: Were Credit Shocks Causing It?," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 226-245, June.
    9. Treier, Volker, 2001. "Steuerwettbewerb in Mittel- und Osteuropa: Eine Einschätzung anhand der Messung effektiver Grenzsteuersätze," BERG Working Paper Series 36, Bamberg University, Bamberg Economic Research Group.
    10. Fischer, Stanley & Sahay, Ratna & Vegh, Carlos, 1998. "How far is Eastern Europe from Brussels?," MPRA Paper 20059, University Library of Munich, Germany.
    11. Anatoliy G. Goncharuk, 2006. "Economic Efficiency in Transition: The Case of Ukraine," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 4(2), pages 129-143.
    12. W. G. Huff, 1999. "Singapore's economic development: Four lessons and some doubts," Oxford Development Studies, Taylor & Francis Journals, vol. 27(1), pages 33-55.
    13. Mallick, Debdulal, 2012. "The role of the elasticity of substitution in economic growth: A cross-country investigation," Labour Economics, Elsevier, vol. 19(5), pages 682-694.
    14. Cevdet Denizer & Holger C. Wolf, 2000. "The Saving Collapse during the Transition in Eastern Europe," World Bank Economic Review, World Bank Group, vol. 14(3), pages 445-455, September.
    15. Laurent Weill, 2008. "On the inefficiency of European socialist economies," Journal of Productivity Analysis, Springer, vol. 29(2), pages 79-89, April.
    16. Noland, Marcus & Robinson, Sherman & Wang, Tao, 2000. "Rigorous Speculation: The Collapse and Revival of the North Korean Economy," World Development, Elsevier, vol. 28(10), pages 1767-1787, October.
    17. Brendan K. Beare, 2008. "The Soviet Economic Decline Revisited," Econ Journal Watch, Econ Journal Watch, vol. 5(2), pages 135-144, May.
    18. repec:eee:rujoec:v:1:y:2015:i:1:p:30-54 is not listed on IDEAS

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:4735. 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: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.