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Shortages and the Informal Economy in the Soviet Republics: 1965-1989

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  • Kim, Byung Yeon
  • Shida, Yoshisada

Abstract

We measure the informal economy and shortages of consumer goods in the Soviet republics from 1965 to 1989 to estimate the relationships of these two variables. We use fixed-effect model and instrument variable approach and find that the informal economy and shortages reinforce each other. Results indicate that the Soviet central planning system is difficult to sustain in the long run. A substantial heterogeneity across the Soviet republics exists not only in the extent of the informal economy and shortages, but also in the associations of the two variables.

Suggested Citation

  • Kim, Byung Yeon & Shida, Yoshisada, 2014. "Shortages and the Informal Economy in the Soviet Republics: 1965-1989," RRC Working Paper Series 43, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:rrcwps:43
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/26494/RRC_WP_No43.pdf
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    References listed on IDEAS

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    1. Wojciech Charemza & Richard E. Quandt, 1982. "Models and Estimation of Disequilibrium for Centrally Planned Economies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 109-116.
    2. Kim, Byung Yeon, 1997. "Soviet Household Saving Function," Economic Change and Restructuring, Springer, vol. 30(2-3), pages 181-203.
    3. Howard, David H, 1976. "The Disequilibrium Model in a Controlled Economy: An Empirical Test of the Barro-Grossman Model," American Economic Review, American Economic Association, vol. 66(5), pages 871-879, December.
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    5. Asgary, Nader & Gregory, Paul R & Mokhtari, Manouchehr, 1997. "Money Demand and Quantity Constraints: Evidence from the Soviet Interview Project," Economic Inquiry, Western Economic Association International, vol. 35(2), pages 365-377, April.
    6. Gur Ofer & Joyce Pickersgill, 1980. "Soviet Household Saving: A Cross-Section Study of Soviet Emigrant Families," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(1), pages 121-144.
    7. Kim, Byung-Yeon, 1999. "The Income, Savings, and Monetary Overhang of Soviet Households," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 644-668, December.
    8. Byung-Yeon Kim, 2002. "Causes of repressed inflation in the Soviet consumer market, 1965–1989: retail price subsidies, the siphoning effect, and the budget deficit[I thank An]," Economic History Review, Economic History Society, vol. 55(1), pages 105-127, February.
    9. Harrison, Mark & Kim, Byung-Yeon, 2006. "Plans, Prices, and Corruption: The Soviet Firm Under Partial Centralization, 1930 to 1990," The Journal of Economic History, Cambridge University Press, vol. 66(1), pages 1-41, March.
    10. Ivanov, Youri & Khomenko, Tatiana, 2009. "A Retrospective Analysis of the Economic Development of Countries of the Commonwealth of Independent States," RRC Working Paper Series 17, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    11. Barbara Anderson & Brian Silver, 1983. "Estimating russification of ethnic identity among non-Russians in the USSR," Demography, Springer;Population Association of America (PAA), vol. 20(4), pages 461-489, November.
    12. Kim, Byung-Yeon, 2003. "Informal economy activities of Soviet households: size and dynamics," Journal of Comparative Economics, Elsevier, vol. 31(3), pages 532-551, September.
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    Cited by:

    1. Shida, Yoshisada, 2015. "Forced Savings in the Soviet Republics: Re-examination," RRC Working Paper Series 54, Russian Research Center, Institute of Economic Research, Hitotsubashi University.

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    More about this item

    Keywords

    shortages; informal economy; Soviet republics;
    All these keywords.

    JEL classification:

    • P21 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Planning, Coordination, and Reform
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • P36 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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