Economy In Transition Essay

950 WordsDec 8, 20104 Pages
Transition Economy In this assignment we had to find and research a country which is in transition and identify the problems the country has faced in transition using economic indicators to prove it. I chose the country Russia which is in transition from the year the Soviet Union dissolved in 1991 to the present day. The indicators that I am going to use in this essay to show the effect of the transition going from a centrally planned economy to a free market economy are: GDP (Gross Domestic Product), which means the total value of all final goods and services within a single country over a given time period, which is one calendar year, GDP per capita, next I will discuss inflation, which simply means that prices of goods and services rise, after that unemployment, population, external debt, and finally exports and imports. All of these indicators I will use in a table to show the different years and how it is developing. The following, I will discuss with some pieces of information: HDI (Human Development Index), which measures money, education, medication, literacy and is measured from a scale of 0 to 1. Finally, I will end the discussion with a prediction about the future. Since the breakdown of the Soviet Union, the Russian federation never really adapted itself to a free market economy. In 1991, the whole GDP went collapsing and basically the move to a free market based economy from a planned economy brought many problems. After the collapse of the communist regime, there had to be a price control reform, which resulted, in 1992, to inflation rates being up to 2,520 %.When you compare it to the current inflation, which is about 11.9%, it seems like a huge difference and shows the improvement that Russia has made adapting to the free market system. First, I will discuss the gross domestic product. The 1994 Russian GDP was about US$678 billion, making the

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