A new estimate of Lithuanian GDP for 1937: How does interwar Lithuania compare?

Abstract

Utilizing archival data from the Lithuanian Central Bureau of Statistics, we piece together the most complete gross domestic product (GDP) figure during the interwar period for Lithuania in accordance with the System of National Accounts (SNA 2008). Lithuania and the other Baltic states have largely been ignored by economic historians due to the short time spans of their independence in the interwar period (1918–1940), their relatively small sizes, and the scarcity of data—we attempt to fill this gap in the historical record. As a practical application of our new GDP estimate for 1937, we convert our estimate into 1990 Geary–Khamis dollars so that we can test the hypothesis that Lithuanian economic growth under communism was below average when compared to its European neighbors using data from the Maddison Project. We find that the economic growth rate in Lithuania was above average from 1937 to 1973, even when compared to other communist economies. Alternatively, from 1973 to 1990, growth collapsed and was below average. Using a difference-in-difference strategy we also find a significant GDP per capita penalty for communist countries in Europe over the studied time periods.