USSR: Measures of Economic Growth and Development, 1950-80

Approved for Release: 2019/07/19 C05210421
and agriculture (livestock) sectors, and each portion of (state administration and the administrative organs of
the capital stock is revalued according to the price social organizations, culture, health, education, forest-
variable, p(i), of the sector producing the capital. ry, municipal services, general agricultural programs,
Second, the constraint is added that factor-cost GNP and civilian police) was given a rate of return one-half
must equal established-price GNP. These refinements that of the other sectors.
produce the system of equations:
n n With equations (6) and (7) solved, and the entire l-O
(6) p(j)XU)= §p(i)x(i,j)+W(j)+d(j)+r§p(i)K(i’j), table repriced in factor-cost prices, the only step
i=1 i=1 remaining was to rearrange the data in accord with
our definitions of GNP sectors. In effect, the adjust-
ments described in the first section of this appendix
n were made in reverse order. The result is a Western-
(7) w(j).+_d(j)+r Zp(i)K(iJ)=GNP (established prices), style I970 I-O table WIIITGNP by end USC and by
i=1 sector of origin in factor-cost prices as two of its
components.
where K(i,j) is the amount of capital produced by
sector i and owned by sector j.
There are n equations of type (6) and one equation (7),
for a total of n+1. There are n unknown price
variables, p(i), and one unknown interest variable, r,
for a total of n+ l. Equation (6) is nonlinear, however,
and the system must be solved by iteration.
The capital data were derived principally from the
estimates by Constance B. Krueger of capital stock by
major sector in 1955 prices (USSR: Gross Fixed
Capital, unpublished, 1976). Capital stock of the
various services were estimated primarily from data in
Rutgayzer, Resursy razvitiya neproizvodstvennoy
sfery, and other monographs on the service sector.
Imputed depreciation was also added for capital stock
for which the Soviets do not compute amortization
deductions (primarily the capital used by budget
organizations).
In order to make our accounts more comparable to
those of OECD countries, a compromise between the
theoretical standard of an equal rate of return on
capital in all sectors and the OECD practice of not
imputing any return on government capital was
adopted. In the version used here, the capital stock of
the housing sector and of the government sectors
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Approved for Release: 2019/07/19 C05210421