2. Web Ch. - 1 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show RUSSIA & CHINA Transition Economies: Web C H A P T E R

3. Web Ch. - 2 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show Marxian Ideology Labor theory of value Surplus Value State Ownership Central Economic Planning IDEOLOGY & INSTITUTIONS

4. Web Ch. - 3 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show PLANNING GOALS & TECHNIQUES Industrialization (Rural Development in China) Overcommitment of Resources Mobilization of Resources Allocation by Directives Government Price Setting Self-Sufficiency Passive Macroeconomic Policies

5. Web Ch. - 4 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show Problems with Central Planning The Coordination Problem The Incentive Problem PLANNING GOALS & TECHNIQUES

6. Web Ch. - 5 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show COLLAPSE OF THE SOVIET ECONOMY Declining Growth Poor Product Quality Few Consumer Goods Large Military Burden Agricultural Drag

7. Web Ch. - 6 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show RUSSIAN TRANSITION TO A MARKET SYSTEM Privatization Price Reform Promotion of Competition Making Ruble Fully Convertible Price-Level Stabilization Other Major Problems Future Prospects

8. Web Ch. - 7 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show CENTRALLY PLANNED PRICE EFFECTS D S’ S Price per unit Quantity demanded and supplied 0 PfPf FIXED LOW PRICE CEILING BY GOVERNMENT LEADS TO… SHORTAGE

9. Web Ch. - 8 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show D S’ S Price per unit Quantity demanded and supplied 0 PaPa PfPf SHORTAGE Without privatization prices rise to P a CENTRALLY PLANNED PRICE EFFECTS

10. Web Ch. - 9 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show D S’ S Price per unit Quantity demanded and supplied 0 PaPa PePe PfPf SHORTAGE With privatization prices rise to P e CENTRALLY PLANNED PRICE EFFECTS

11. Web Ch. - 10 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show MARKET REFORMS IN CHINA Agricultural & Rural Reform Township & Village Enterprises Reform of Urban Industries State Owned Enterprises (SOE) Urban Collectives Special Economic Zones (SEZs) Development of Supporting Institutions Transformation of the SOEs

12. Web Ch. - 11 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show OUTCOMES & PROSPECTS Positive Outcomes of Reform Problems Incomplete Property Rights Macroeconomic Instability Integration into the Global Economy Geographically Uneven Development

13. Web Ch. - 12 Copyright McGraw-Hill/Irwin, 2002 Ideology and Institutions Planning Goals and Techniques Collapse of the Soviet Economy Russian Transition to a Market Economy Centrally Planned Price Effects Market Reforms in China Outcomes and Prospects Key Terms Previous Slide Next Slide End Show OUTCOMES & PROSPECTS Positive Outcomes of Reform Problems Incomplete Property Rights Macroeconomic Instability Integration into the Global Economy Geographically Uneven Development Chapter Conclusions

14. labor theory of value surplus value state ownership central economic planning coordination problem incentive problem town & village enterprises state-owned enterprises (SOEs) urban collectives special economic zones (SEZs) ENDBACK Copyright McGraw-Hill/Irwin 2002

15. labor theory of value surplus value state ownership central economic planning coordination problem incentive problem town & village enterprises state-owned enterprises urban collectives special economic zones ENDBACK Copyright McGraw-Hill/Irwin 2002