AN ANALYSIS OF TECHNICAL CHANGE IN THE SOVIET ECONOMY: AN APPLICATION OF SOVIET INPUT-OUTPUT TABLES

This dissertation tests the feasibility of updating Soviet input-output (I-O) tables, computes a twenty sector updated I-O table for each year in the 1959-1977 period, and uses these updated tables to estimate changes in the efficiency of the use of fossil fuels in the Soviet Union. The Soviet Union has published I-O tables for the years 1959, 1966, and 1972. These three tables are first compared with each other to determine the degree of change between them and, hence, the need for updating them in order to analyze the Soviet economy more accurately. Three basic I-O updating algorithms are tested with the three I-O tables to determine the expected accuracy of an updated Soviet I-O table and to determine which algorithm has the best predictive power. The three basic algorithms are the logarithmic (RAS), least squares, and linear programming algorithms. The sensitivity of the least squares algorithm is tested by applying different weights to each cell of the I-O table which is used as a base for the prediction. The most accurate updating algorithms are the RAS algorithm and one version of the least squares algorithm. The least accurate algorithms are the linear programming algorithm and other versions of the least squares algorithm. The tests show that the twenty sector 1959 table can be updated to 1966 by using only gross output information for 1966 with an average error of about fifteen percent. Similarly, the 1966 table can be updated to 1972 with an average error of about nine percent. The lower average error for updating the 1966 table to 1972 is encouraging because the 1966-1972 period included many large price changes. It is thought, therefore, that the 1972 table can be updated with an even smaller error for six years or more. The high average error for updating the 1959 table to 1966 is thought to be a reflection of the poor quality of the 1959 table. It was the first I-O table compiled by the Soviet Union and there is considerable evidence that it should be treated as a learning experience. In order to compute an updated I-O table for each year in the 1959-1977 period, gross output and value added data were estimated for each of twenty sectors for each year. A version of the least squares algorithm was then used to compute a twenty sector I-O table for each year. The estimated use of coal, oil, and gas by each sector indicated by these updated tables was then used to estimate four indexes of the efficiency of fossil fuel usage in the Soviet Union. This series of I-O tables was used to analyze changes in Soviet fuel productivity as an example of the utility of updated I-O tables. The results show that the Soviet economy has not responded to the large price increases of fuel on the world markets since 1973 by using less fuel per unit of output. The primary cause has been a large increase in the amount of fuel used per unit of output in agriculture. The other sectors tended to show small gains in fuel efficiency.