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The Second Economy and the Destabilizing Effect of Its Growth on the State Economy in the Soviet Union, 1965-1989

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Date
1993
Authors
Treml, Vladimir G
Alexeev, Michael
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Abstract
The authors suggest that the rapid growth of the illegal underground economy in 1970s and 1980s has destabilized the Soviet state economy and weakened the mechanism of central planning. This hypothesis is advanced on the basis of the examination of striking decline in income (legal) elasticities of demand for a number of consumer goods purchased in state retail trade in Russia and Ukraine. The growth of income from illegal sources and purchases of consumer goods in black markets explains this phenomenon.
Type
Journal article
Subject
Destabilizing effect
Regression results
Second economy
Soviet Union
Permalink
https://hdl.handle.net/10161/2007
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