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Why did socialist economies fail? The role of factor inputs reconsidered
Author(s) -
Vonyó Tamás,
Klein Alexander
Publication year - 2019
Publication title -
the economic history review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.014
H-Index - 49
eISSN - 1468-0289
pISSN - 0013-0117
DOI - 10.1111/ehr.12734
Subject(s) - economics , investment (military) , fixed investment , total factor productivity , capital (architecture) , setback , capital accumulation , productivity , stock (firearms) , market economy , monetary economics , economy , macroeconomics , capital formation , financial capital , human capital , political science , politics , history , mechanical engineering , archaeology , law , engineering
This article presents new estimates for investment and new growth accounts for three socialist economies between 1950 and 1989. Government statistics reported distorted measures for both the rate and the trajectory of productivity growth in Czechoslovakia, Hungary, and Poland. Researchers have benefited from revised output data, but have continued to use official statistics on capital input, or estimated capital stock from official investment data. Investment levels and rates of capital accumulation were much lower than officially claimed and over‐reporting worsened over time. A setback in factor accumulation—both investment in equipment and labour input—contributed very significantly to the socialist growth failure of the 1980s.