Russia and the Soviet Union Then and Now

Stanley Fischer

NBER Working Paper No. 4077
Issued in May 1992
NBER Program(s):   EFG

The main focus of this paper is on the process and progress of economic reform in Russia. But I start with four historical questions that bear on the current situation. How advanced was Russia in 1913? What relevance, if any, does the New Economic Policy of the 19205, or NEP, have for the current situation? Why did economic growth in the Soviet Union slow in the 1970s and 1980s? What role did Gorbachev's policies play in bringing about the final collapse of the Soviet Union? Russia's approach to reform is similar to that in several East European countries. It differs in having started with a major price liberalization, before macroeconomic stabilization was assured. I then tum to the close links between macroeconomic stabilization and enterprise restructuring that have emerged in the Russian political process, and analyze the need for an explicit industrial restructuring policy that goes beyond privatization. The paper concludes with a discussion of the interrelated questions of inter-republican trade, payments, and new currencies. I describe and evaluate the case for an inter-republican payments union or the more modest type of organization, an inter-republican payments mechanism, that is likely to emerge.

(3439 K)

Published: The Transition in Eastern Europe Edited by Jean Blanchard, Kenneth A. Froot, and Jeffrey D. Sachs University of Chicago Press; Forthcoming 1993

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