The record of economic growth and structural change in the Soviet Union after 1928 is well established and is not the topic of this chapter per se. Instead, the pattern of economic growth in the late tsarist era is to be compared with that of the Soviet Union during the era of central planning.

Especially for the early five-year-plan period (1928–40), index number effects complicate such a comparison, for the economic growth and structure of the Soviet economy are markedly affected by the choice of “early” or “late” year price weights. For example, the annual rate of growth between 1928 and 1937 (real GNP) was approximately 5.5% in 1937 and 1950 (“late”) prices but was almost 12% in 1928 (“early”) prices. The 1928 ratio of gross investment to GNP was 13%–14% in “late” prices but 25% in “early” prices. Calculations of Soviet economic growth in “early” prices are not available for the period after 1937, but it is obvious that Soviet growth over the entire plan era would be much more rapid when valued in “early” prices. Thus the assessment of Soviet growth performance depends greatly upon the choice of price weights.

BIASES AND INDEX NUMBER EFFECTS

In Chapters 2 and 3, estimation biases in the tsarist period calculations and the effect of alternate price weights upon the tsarist period growth indexes were addressed.