Was Stalin Necessary for Russia's Economic Development? / Anton Cheremukhin, Mikhail Golosov, Sergei Guriev, Aleh Tsyvinski.

Format:

Book

Author/Creator:

Cheremukhin, Anton.

Contributor:

National Bureau of Economic Research.

Golosov, Mikhail.

Guriev, Sergei.

Tsyvinski, Aleh.

Series:

Working Paper Series (National Bureau of Economic Research) no. w19425.

NBER working paper series no. w19425

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2013.

Summary:

This paper studies structural transformation of Soviet Russia in 1928-1940 from an agrarian to an industrial economy through the lens of a two-sector neoclassical growth model. We construct a large dataset that covers Soviet Russia during 1928-1940 and Tsarist Russia during 1885-1913. We use a two-sector growth model to compute sectoral TFPs as well as distortions and wedges in the capital, labor and product markets. We find that most wedges substantially increased in 1928-1935 and then fell in 1936-1940 relative to their 1885-1913 levels, while TFP remained generally below pre-WWI trends. Under the neoclassical growth model, projections of these estimated wedges imply that Stalin's economic policies led to welfare loss of -24 percent of consumption in 1928-1940, but a +16 percent welfare gain after 1941. A representative consumer born at the start of Stalin's policies in 1928 experiences a reduction in welfare of -1 percent of consumption, a number that does not take into account additional costs of political repression during this time period. We provide three additional counterfactuals: comparison with Japan, comparison with the New Economic Policy (NEP), and assuming alternative post-1940 growth scenarios.

Notes:

Print version record

September 2013.