The Changing Soviet Priority Economy

Modeling the Conflict Between Gold and the Sword

by Gregory G. Hildebrandt, Peter Staugaard

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Part of a larger study designed to develop new methods and models for analyzing the Soviet economy that are linked more closely than are existing models to certain key characteristics of the Soviet system, this Note investigates Soviet decisionmaking during plan implementation using a prototype input-output model. It characterizes the conflict between the exogenous priority system that is specified by the leadership and the endogenous priority system that emerges from the structure of an interdependent economy. In general, the authors find that a shock in any sector causes unemployed resources in the nonpriority sector of the priority model. Also, final output in this model is always less than or equal to that obtained in the marginalist model.

This report is part of the RAND Corporation Note series. The note was a product of the RAND Corporation from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

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