Update 2024-04-24

_toc.yml

@@ -855,3 +855,5 @@ subtrees:
         title: Intro
       - file: vwl6/VL_Sozialismus/2024-04-18-Marx.md
         title: Marx
+      - file: vwl6/VL_Sozialismus/2024-05-23-Long-Run.md
+        title: Long Run

vwl6/VL_Sozialismus/2024-05-23-Long-Run.md

@@ -0,0 +1,108 @@
+## 23.05.2024 Effects in the Long run
+
+> Communism = Soviet Power + Electrification (**Lenin**)
+
+Hypotheses:
+
+1.  Planning = long run bad for growth
+    - static allocative inefficiencies
+    - inhibits adoption of higher up technology
+    - no creative destruction
+2. Planning = over-focus on physical investment and education
+
+Methods: Regressions and a *new Model*
+
+### Planning and Growth
+
+Initial Advantage of Planning 
+
+- mobilize savings better
+- better infra => higher ROI on investment
+- more ducation => higher real wages
+
+=> good for pre-industrial countries 
+
+
+
+Adoption of Planning
+
+1. Group: Russia and extended after 1.WW
+2. Group: bloc expansion after 2.WW
+
+Different types of adopter countries:
+
+- Agrarian (Balkan etc.)
+- industrious (Czech, East Germany, …)
+
+Comparators:
+
+- European, Central Asian …
+
+
+
+**Method**: Regression
+$$
+ln(GDP) = \beta_0 + \beta_1 PLAN+ \beta_2 ln(GDP_{t1}) + \beta_3 (PLAN \cdot GDP)
+$$
+
+- PLAN = Dummy for planned economy
+- Esitmation of Contrafact
+
+
+
+**Results:**
+
+![img](../images/2024-04-24_17-24-21.jpg)
+
+- ME = Market Economy
+- PE = planned economy
+- countries with higher GDP at start = comparatively lower GDP in end
+- vice-versa
+
+## Education and Investment
+
+Method = similar to above
+
+Results:
+
+![img](../images/2024-04-24_17-28-04.jpg)
+
+- Caveat: Aggreagte Infastrucutre =! usable infrastructue
+- planners planed only transport infratstructure, not personal (eg. commuter rail)
+- human capital measurement as years =! always usable in market economy (e.g Marxist study)
+
+
+
+Insitutional Heritage
+
+- measured with "Ease of Doing Businnes" Indicator
+- difficult indicators
+- no clear picture emerges
+
+![img](../images/2024-04-24_17-31-24.jpg)
+
+## Model 
+
+Data = individual Business Surveys
+
+- World BAnk Questionnaires
+- firms asked to evaluate public inputs
+    - Telecoms, electriciy, skills, stability, ...
+    - how hindering they are
+- => shadow price interpretation
+
+General Results:
+
+![img](../images/2024-04-24_17-37-46.jpg)
+
+- PE = hgigher shadow prices of public inputs
+- means more difficult business environment
+- rich PE = differ less from ME peers than poor PE vs their peers
+- poor PE vs their peers
+    - better education, physical capital, labor costs etc
+    - worse institutions: corruption, courts, ...
+
+
+
+**=> Benefit of Communism depends on inital stage**
+