Russia's Crash of August 1998: Diagnosis and Prescription

Abstract

A distinguished French specialist on the Soviet and Russian economies analyzes the financial, political, and institutional crises facing Russia in 1999. Discussion of the vulnerabilities of the economy prior to the crash of 1998 is followed by a suggested program for coping with the currency, banking, and public finance crises, and for building market institutions. Comparisons are drawn with the post-war experiences of France, Italy, and Japan. The article includes an extended critique of the assumptions underlying alternative interpretations and prescriptions.

Structural Change and Post-Socialist Stratification: Labor Market Transitions in Contemporary Russia

“…Structural, political, and policy factors all contributed to the unusual length and depth of Russia's recession (see Burawoy 1996;Ickes, Murrell, and Ryterman 1997;Popov 1998;Sapir 1999). The prior structural distortions in Russia were more extreme than in other countries, which would have necessitated a more thorough macroeconomic adjustment even in the best of circumstances.…”

Welfare Impacts of the 1998 Financial Crisis in Russia and the Response of the Public Safety Net

“…The crisis combined a devaluation of the rouble, default on both domestic and foreign debts, and a collapse of the stock market (Brown, 1999;Buchs, 1999;Sapit, 1999;Slay, 1999). Several events preceded the crisis.…”

Consumption smoothing in Russia1

“…The fledgling market economy had barely been showing some hesitant signs of recovery when the 1998 financial and economic crisis struck. It led to defaults on domestic and foreign debts followed by a wave of bankruptcies, a devaluation of the ruble and a collapse of the stock market (Brown, 1999; Buchs, 1999; Sapir, 1999; Slay, 1999). Many households lost large parts of their lifetime savings.…”