Modeling Soviet Modernization: An Economy in Transition

Abstract

This paper uses a macroeconomic model to evaluate prospects for Soviet economic growth to the year 2000. Because of the considerable uncertainty regarding the ultimate success of Gorbachev's modernization program and reform package, and because of the long time frame of the projection, a single “most likely” forecast cannot be made. Instead, three scenarios were constructed to reflect different degrees of success for Gorbachev's initiatives. The results of these simulations provide insights into what is possible and illustrate the dynamics involved when an economy administered by central planners for nearly 70 years attempts to change its method of operation. Journal of Economic Literature, Classification Numbers: 027, 124, 211.