ABSTRACT
82The deficiencies of the official measure of industrial growth for the former Soviet Union are well documented. The official indicator is unacceptable because of twin biases of new-product pricing and double counting that normally exaggerates growth. In the first instance, prices assigned to new industrial products are often too high relative to prices for products to be replaced in view of the changes in technology and quality. In the second case, bias from double counting arises from increasing specialization in the production of a given commodity when enterprises increase their dependency on other enterprises for intermediate goods. 1
This paper develops a series of synthetic measures of industrial output for each of the 15 republics of the former U.S.S.R., remembering that there is a wide difference in the regional distribution by branch of industry. 2 Patterns of specialization in industrial structure of the former republics were driven, in part, by the uneven distribution of resources and, in part, by the historical roots of economic development reaching into the pre-communist era. Because the bias in the officially published measure of growth is greater in some branches than others, a distorted view of past overall industrial growth for the several former republics would result if the All-Union discount for overall industry was applied to each of the republics.
