Capital formation and economic growth under central planning and transition: A theoretical and empirical analysis, ca. 1920–2008

Péter Földvári; Bas van Leeuwen; Dmitry Didenko

doi:10.1556/aoecon.65.2015.1.2

Acta Oeconomica

Volume/Issue:: Volume 65: Issue 1

Capital formation and economic growth under central planning and transition: A theoretical and empirical analysis, ca. 1920–2008

Authors:

Péter Földvári

Péter Földvári Utrecht University Department of History and Art History Utrecht Netherlands

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Bas van Leeuwen

Bas van Leeuwen Utrecht University Department of History and Art History, and at the International Institute of Social History Utrecht Netherlands

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, and

Dmitry Didenko

Dmitry Didenko The state corporation (Bank for Development and Foreign Economic Affairs) (Vnesheconombank) Moscow Russia

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Pages:: 27–50

Online Publication Date:: 28 Mar 2015

Publication Date:: 01 Mar 2015

Article Category:: Journal Article

DOI:: https://doi.org/10.1556/aoecon.65.2015.1.2

Keywords:: Central planning; capital accumulation; human capital; Soviet Union; national accounts; E01; E22; O11; O21

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According to the consensus view, it was primarily physical capital accumulation that drove economic growth during the early years of state socialism. Growth models incorporating both human and physical capital accumulation led to the conclusion that a high physical/human capital ratio can cause a lower economic growth in the long run, hence offering an explanation for the failure of socialist economies. In this paper, we show theoretically and empirically that according to the logic of the socialist planner, it was optimal to achieve a higher physical to human capital ratio in socialist countries than in the West. Using a VAR analysis, we find empirical confirmation that within the Material Product System of national accounting, the relative dominance of investment in physical capital accumulation relative to human capital was indeed more efficient than under the system of national accounts.

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Acta Oeconomica Periodical of the Hungarian Academy of Sciences

Print ISSN:: 0001-6373

Online ISSN:: 1588-2659

Associate Editors

Péter Benczúr, Joint Joint Research Center, European Commission
Dóra Benedek, International Monetary Fund
Balázs Égert, OECD
Dániel Prinz, World Bank
Rok Spruk, University of Ljubljana, School of Economics and Business, Slovenia

Editorial Board

Anders Åslund, Georgetown University and Advisory Council of CASE, USA
István Benczes, Corvinus University of Budapest, Hungary
Agnieszka Chłoń-Domińczak, SGH Warsaw School of Economics, Poland
Fabrizio Coricelli, University of Siena, Italy
László Csaba, Corvinus University of Budapest, Hungary and Central European University, Austria
Beáta Farkas, Faculty of Economics and Business Administration, University of Szeged, Hungary
Péter Halmai, Budapest University of Technology and Economics, and National University of Public Service, Hungary
Martin Kahanec, Central European University, Austria
David Kemme, University of Memphis, USA
Michael Landesmann, The Vienna Institute for International Economic Studies (WIIW), Austria
Péter Mihályi, Corvinus University of Budapest, Hungary
Debora Revoltella, European Investment Bank

Corvinus University of Budapest
Department of Economics
Fővám tér 8 Budapest, H-1093, Hungary
E-mail: judit.kalman@uni-corvinus.hu

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2024
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Acta Oeconomica
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Acta Oeconomica
Language	English
Size	B5
Year of Foundation	1966
Volumes per Year	1
Issues per Year	4
Founder	Magyar Tudományos Akadémia
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ISSN	0001-6373 (Print)
ISSN	1588-2659 (Online)