ABSTRACT
The pitfalls awaiting analysts of Soviet-type economies (STEs) using a coherent framework have often been underestimated. These pitfalls are generally of two kinds: firstly, difficulties in explaining macro-economic relationships in terms of the received theory (whether neoclassical or Keynesian); and secondly, difficulties in using the distorted official data. Both sets of problems stem from the same sources. It is system-specific features which make the characteristic macro effects under central planning — excess demand, shortage, uncertainty — mean something somewhat different from those terms as they are understood by many Western economists (which is, by the way, an important source of misunderstanding). Moreover, the same features generate quantity and price distortions that again make STE statistics different from those in market economies (or MEs).
