US AND USSR: COMPARISONS OF SIZE AND USE OF GROSS NATIONAL PRODUCT 1955-64

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• Publication Date: March 1, 1966
• Content Type: REPORT

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CIA/RR ER 66-6
March 1966 -
INTELLIGENCE REPORT
US AND USSR:
COMPARISONS OF SIZE AND USE
OF GROSS NATIONAL PRODUCT
1955764
DIRECTORATE OF INTELLIGENCE
Office of Research and Reports
SECRET
GROUP I
Excluded from automatic
downgrading and
declassification
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WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
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Summary
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CONTENTS
I. Introduction
Page
1
5
A. Some General Considerations in International
Comparisons of Gross National Product 5
B. The Index Number Problem 6
C. The Meaning of the Two Comparisons and of the
Geometric Average 8
II.
Method of Constructing the Comparisons
11
A. Estimation of Gross National Product and
End Uses
11
B. Derivation of Ruble/Dollar Ratios
13
1. Calculation of the Basic Ratios
14
2. Adjustment of Certain Ratios
14
a. Uncertainties and Biases in the Data ?
b. Justification for Raising Individual
?
?
15
Ratios
17
3. Final Ruble/Dollar Ratios for Gross National
Product and End Uses
19
III.
Comparisons of Relative Size of US and Soviet Gross
National Product and Major End Uses, 1955-64
21
A. Comparative Size of Total Gross National Product
21
B. Comparative Size of Major End Uses of Gross
National Product
24
C. Comparative Size of National Policy Expenditures
?
?
26
D. Comparison of Present and Previous Estimates
of US and Soviet Gross National Product
29
Appendixes
Appendix A. Derivation of Basic Ruble/Dollar Ratios ? ? ? . 33
Appendix B. Statistical Tables 37
Appendix C. Source References 57
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Page
Tables
1. Soviet Gross National Product as a Percentage
of US Gross National Product, 1955-64 22
2. US and USSR: Average Annual Rates of Growth
of Gross National Product, by End Use, 1956-6)4 23
3. Soviet National Policy Expenditures as a Percentage
of US National Policy Expenditures, 1955-63 27
4. Comparison of Present and Previous Estimates
.of Soviet Gross National Product as a Percentage
of US Gross National Product, 1963 31
5. US: Derivation of Gross National Product, by End
Use, in Current Dollars, 1955-64 39
6. US: Derivation of Major Subcomponents of Consumption
and Investment in Current Dollars, 1955-64 42
7. US: Gross National Product, by End Use, in 1963
Dollars, 1955-64 44
8. USSR: Gross National Product, by End Use,
in 1955 Rubles, 1955-64 45
9. US and USSR: Derivation of 1955 Ruble/1963 Dollar
Ratios 46
10. US: Gross National Product, by End Use, in 1955
Rubles, 1955-64 49
11. USSR: Gross National Product, by End Use,
in 1963 Dollars, 1955-64 50
12. US and USSR: 1955 Ruble/1963 Dollar Ratios for Gross
National Product, by End Use, 1955-64 51
13. US and USSR: National Policy Expenditures, 1955-63 . 52
14. Previous Ruble and Dollar Estimates of Soviet and
US Gross National Product, by End Use, 1963 55
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Figure 1.
Figure
Figure
US and USSR:
by End Use,
2. US and USSR:
1955-64
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Charts
Gross National Product,
1964
Gross National Product,
3. US and USSR: Major End Uses
of Gross National Product,
1955, 1958, and 1964
Figure 4. US and USSR: National Policy Expenditures,
1955, 1958, and 1963
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US AND USSR: COMPARISONS OF SIZE AND USE
OF GROSS NA.TIONA.L PRODUCT*
1955-64
Summary
This report presents new estimates of the size of the Soviet
economy compared with that of the United States. The new com-
parisons show the total gross national product (GNP) of the USSR
and each major end use of GNP except defense to be significantly
smaller than indicated by previous comparisons. The relative
size of Soviet GNP is lowered by about 10 percent, but that of
investment and government administration is smaller by about
20 percent. The difference is partly the result of a lower esti-
mate of the ruble value of Soviet investment but, more impor-
tantly, of an arbitrary adjustment of the ruble/dollar price
ratios for certain components of GNP. These adjustments
attempt to take into account (1) the lower quality of Soviet dura-
ble goods, which in previous comparisons was assumed to be the
same as in the United States, and (2) the lower productivity of
Soviet workers in health and education and in administration,
for which no allowance was previously made. These adjustments
correct, in part at least, for the most important known biases
in the US-USSR comparisons. The new comparisons are neces-
sarily preliminary and imprecise and are believed still to over-
state the size of the Soviet economy relative to that of the
United States.
The new estimates show that in 1964 the gross national
product of the USSR (US$276.6 billion)** was considerably less
than half of that of the United States. Consumption of the Soviet
population compared less favorably than GNP -- well below two-
fifths of US consumption. On a per capita basis, Soviet GNP
was 38 percent of the US level, and Soviet consumption was
31 percent of that of the United States. But Soviet investment,
* The estimates and conclusions in this report represent the
best judgment of this Office as of 1 February 1966.
** In 1963 dollars. Based on the geometric average comparison.
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which reflects the high priority of economic growth, was a
little over two-thirds of US investment, and Soviet defense
expenditures were somewhat more than four-fifths of those
of the United States. These relationships -- depicted in
Figure 1 -- did not change significantly in 1965.
The relative positions of the USSR and the United States
with respect to total GNP and each of the major end uses
shifted significantly between 1955 and 1964, the most
striking changes having occurred in the first four years of
the period. Between 1955 and 1958, Soviet GNP rose from
38 percent to 45 percent of the US level, about where it
stood also in 1964. Soviet consumption increased slowly
as a percent of that of the United States -- from 32 percent
in 1955 to 36 percent in 1964 -- most of the gain having
taken place by 1958. In contrast, dramatic changes
occurred during the period in the relative positions of
investment and defense. The size of Soviet investment
relative to that of the United States rose spectacularly
during 1955-58 -- from 36 percent of the US level to 67 per-
cent, with only a small further gain having been achieved by
1964. The relative size of Soviet defense expenditures, on
the other hand, decreased markedly compared with those of the
United States. In 1955, Soviet defense expenditures exceeded
US expenditures by about 6 percent, whereas by 1958 they
had dropped to 88 percent of the US level, and by 1964 they
were only about 83 percent of the US level. In 1964, Soviet
expenditures for government administration were about
66 percent of those of the United States, compared with
76 percent in 1955.
Important aspects of Soviet economic policy are
illustrated by comparison of a group of strategic com-
ponents of GNP that may be termed national policy expendi-
tures. They include education, industrial investment,
civilian research and development, foreign aid, and
defense. In 1963 they represented 35 percent of total GNP
(in dollars) in the USSR and 20 percent in the United States.
The first three components reflect in broad terms the
relative commitment of the two countries to the promotion
of economic growth, and the latter two items reflect the
commitment to the furtherance of foreign policy objectives.
Taken as a whole, Soviet national policy expenditures
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700
600
500
400
300
200
100
0
Figure 1
US and USSR: Gross National Product, by End Use
1964
GROSS CONSUMPTION
NATIONAL PRODUCT
52298 2-66 CIA
INVESTMENT
*Geometric average comparison
DEFENSE
ADMINISTRATION
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(measured in dollars) were 95 percent of those of the United
States, a small gain from the position in 1955. Expenditures
connected with economic growth (geometric average com-
parisons), however, rose much more rapidly in the USSR
than in the United States. Thus Soviet outlays on education
were 73 percent of those of the United States in 1955 and
89 percent in 1963; industrial investment rose from 63 per-
cent to 121 percent of the US level; and expenditures for
civilian research and development rose from 31 percent to
53 percent of the US level. With respect to foreign policy
expenditures, Soviet outlays on foreign aid increased sub-
stantially compared with the United States (from 9 percent
to 23 percent measured in dollars), but Soviet defense
expenditures declined substantially as a percent of those
of the United States.
The comparisons shown in Figure 1 are the geometric
averages of two comparisons of total GNP and its end uses
in the United States and the USSR -- one when the GNP's of
both countries are valued in dollar prices and the other
when both GNP's are valued in ruble prices. The method
of calculating the comparisons makes use of the domestic
purchasing power of both the ruble and the dollar for
specific goods. These ruble/dollar price ratios for a
representative sample of goods and services in each economy
are used to convert the components of Soviet GNP into dollars
and, conversely, the components of US GNP into rubles.
The two comparisons of GNP, the one in rubles and the
other in dollars, are substantially different. The ratio of
Soviet to US GNP in 1964 in dollars was 56 percent and in
rubles, 36 percent; for consumption and investment the
ratios were 45 and 80 percent in dollars and 29 and 62 per-
cent in rubles. These differences in the ratios are the
result of wide differences in the patterns of output and in
the relative prices in the two countries. Since each coun-
try's prices reflect its own and not the other country's
costs and scarcities,neither comparison is preferable to
the other. The geometric average of the two comparisons
is believed to provide a better measure of the relative
production capabilities of the two economies than is given
by either the ruble or the dollar comparison.
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I. Introduction
Comparative gross national products and their distribution by major
end uses (consumption, investment, defense, and administration) in the
United States and the USSR are used extensively for a variety of purposes.
The comparisons of total GNP's provide the most comprehensive available
measure of the relative sizes of the US and Soviet economies and of their
relative performance and potential. A comparison of the relative sizes
of the major end-use components provides some insight into the policy
choices of the two countries in allocating resources to the welfare
of consumers, the future growth of the economy, and the strategic
objectives reflected in military and space programs. Finally, com-
parative measures of production are used selectively by both sides as
propaganda in the cold war -- a natural result of the great emphasis
placed on economic competition between the United States and the USSR,
not only by the Soviet leadership, with its boasts of catching and
surpassing the United States, but also by the rest of the world.
This report presents new estimates of the relative levels and rates
of growth of GNP and its major end uses in the United States and the
USSR during 1955-64. Because these estimates differ significantly from
previous estimates by this Office, the report also describes the general
methodology for the derivation of the estimates and explains the basis
for changing them. Section II of the report therefore describes the
general methodology and rationale underlying the new estimates, and
Section III gives the new comparisons of GNP and its end uses in the
two countries -- one in dollars, one in rubles, and an average of these
two -- and shows how these comparisons differ from the ones previously
made. In addition, comparisons of a more restricted set of expenditures
termed national policy expenditures -- are shown; they include annual
outlays on education, civilian research, foreign aid, industrial invest-
ment, and defense. By way uf preface, some general remarks are in order
about the meaning that can be attached to international comparisons of
GNP's and about the fundamental statistical problem involved in con-
verting the GNP's of two countries into a common currency.
A. Some General Considerations in International Comparisons
of Gross National Product
Some cautionary words are in order with respect to the meaning
and conclusions that should be drawn from international comparisons
of outputs valued at constant prices, such as those for the United States
and the USSR presented in this report. First, what is measured is the
relative monetary valuations of goods and services produced and not their
relative utilities. Consumers in the USSR, in contrast to the United
States, do not exercise any significant degree of sovereignty over the
pattern of consumption that is provided -- and even if they did, the
quantitative comparison of consumption in the two countries would not,
as all philosophers agree, represent relative consumer satisfaction.
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This familiar theoretical point holds also for investment and defense.
The dollar value of Soviet investment in a given year does not measure
the growth-inducing potential (that is, utility) of that investment
compared with US investment or even with Soviet investment in other
years. The critical measure of growth potential is the additional out-
put yielded by a unit of new investment, which may be very different
in the two countries and may vary greatly from year to year in the
same country. Finally, statistical comparisons of expenditures on defense
(military and space programs) are particularly elusive in meaning.
Although military expenditures may be roughly equal in the United States
and the USSR when Soviet military expenditures are valued in dollars,
this does not mean that the military establishments in the two coun-
tries are equal in effectiveness or in military potential. The com-
parisons are made in terms of price ratios that reflect relative costs
of various kinds of military output -- not firepower, mobility, or
other attributes of military power. Moreover, some aspects of military
power, such as past expenditures or geographic situations, do not enter
into the comparisons at all.
A second caution is that the dollar value of Soviet end-use
components does not measure "cost" to the Soviet economy in the sense,
for example, of measuring the share of resources going to investment
or the "burden" of defense. The concept of "burden" or share of
resources can be measured for each country only in its own domestic
costs. For the United States, domestic costs can be approximated by
prices. In the USSR, where prices are set arbitrarily by the State,
real costs cannot be estimated, and the burden of defense in the sense
of consumption or investment foregone is susceptible of no simple
quantitative measure.
B. The Index Number Problem
The necessary condition for comparing two combinations of
heterogeneous outputs is to express them as value totals using the
same unit values or prices for each kind of output. A traditional
procedure has been to convert the GNP in domestic currency values of
one country into the currency of another country by the international
currency exchange rate. This procedure is meaningless when the exchange
rate is arbitrarily set and foreign trade is a tightly controlled state
monopoly as in the USSR. Even in the case of predominantly private
trade between two private enterprise economies, the exchange rate reflects
prices only of goods and services that are traded internationally and
hence is not representative of the full range of output included in GNP.
In this report the outputs of the United States measured in
dollars and of the USSR measured in rubles are expressed in common value
terms, using calculated average ruble/dollar ratios that reflect the
relative internal domestic prices for identical goods and services
in the two countries. The general procedure used to calculate the
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average ruble/dollar ratios may be illustrated by a description of the
derivation of the ruble/dollar ratio for the food subcomponent of con-
sumption. First, the prices of a representative sample of food items
(48) were collected in both countries, and the ratio of the ruble to the
dollar price of each item was calculated. Two averages of the ruble/
dollar price ratios for these 48 items were then calculated, using as
weights the expenditures they represent in the United States and in the
USSR, respectively. The average ruble/dollar ratio weighted with US
expenditures was then used to convert the dollar value of total US food
production to rubles. Similarly, the average ruble/dollar ratio based
on Soviet expenditure weights was used to convert all Soviet food produc-
tion in rubles to dollars. In the former case the average ruble/dollar
ratio is said to be US-weighted and in the latter, Soviet-weighted. The
two average ruble/dollar ratios are different because the expenditure
weights in the two countries are different. For example, consumption
of potatoes represents almost 10 percent of Soviet expenditures on food
but only 2 percent of US expenditures.
In comparing the size of GNP, or a component of GNP, of the USSR
with that of the United States, two calculations are thus possible,
corresponding to the two average ruble/dollar ratios. Soviet GNP may
be converted to dollars by the Soviet-weighted average dollar/ruble
price ratio, or alternatively, US GNP may be converted to rubles by
the US-weighted average ruble/dollar price ratio. The GNP's of the two
countries thus may be compared either in dollar prices or in ruble
prices. Since the two average price ratios are different, the two GNP
comparisons will be different. This difference is a reflection of a
famous statistical paradox known as the index number problem; a time-
honored resolution of this problem is to use the geometric average of
the two, equally valid, comparisons whenever a single number is aesired.
The index number problem arises in comparing the GNP's of the
two countries because their patterns of output and prices differ greatly,
reflecting differences in tastes, levels of income, natural resources,
technology, and state of development, and because the relative quantities
of goods produced and their relative prices are different in the two
countries. All international comparisons of GNP's, 1/* including the
present report, have found that the ratio of prices of goods between
two countries is inversely related to the ratio of the quantities
produced. In other words, in each country goods that sell at low
prices tend to be produced in large quantities, and vice versa, and
these goods are not the same ones in both countries. In the United States,
for example, consumption goods are cheap in comparison with investment
and defense goods, and the United States produces more of the former
than of the latter; in the USSR, the situation is just the opposite.
* For serially numbered source references, see Appendix C.
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With respect to the comparison of GNP's the effect of the inverse
relationship between relative prices and relative quantities produced
between two countries is to show the size of one country to be larger
compared with another when both GNP's are valued in the other country's
prices. This direction of difference arises because, in converting the
GNP's to a common currency, the relatively higher prices of the latter
country are applied to the relatively larger quantities produced in the
former, and vice versa. Thus, in the case of the comparisons of GNP
and its components in the United States and the USSR, relatively high
ruble/dollar ratios for consumption are associated with the relatively
'Small size of Soviet consumption, and conversely, relatively low ruble/
ddllar ratios go with the higher relative size of Soviet investment,
defense', and administration. As a result, 'Soviet GNP is shown to be a
much-larger percent of US GNP (56 percent in 1964) when the comparison
is iiiade.'incidbilars than when it is made in rubles (36 percent in 196)+).
C. The Meaning of the Two Comparisons and of the Geometric Average
:iSeal.??-frigfi'.- neither comparison really measures the
difference:.dnctotal` ont-ptifcbf the two countries, because no rigorous
comparisOn.-,the totaI.-iantffiltacof two countries is possible, except in
the unlikeiSr.. that'ithey-ar&rbducing an exactly proportional mix
of produCtS:';Since.' in npraetic'e Aheix of products is different between
cduh-tries,'"and:66.ri be. -renderedL ,ro ijini5rrarble terms only by valuing the
product's ?::of One :onntry''.i:irizthepri-ce'S'lkthat'?--is, the scarcity relations)
of 7-Elie ,Libther1). the-limesnd b f s on is in reality a
hypothesi dicabba "what ouldestiltiforf?titintrSOuiere to shift its
production tct1j:-. a 'tir3Lc... of products of
the other` COuntrY:.-' ???1'i::L? L ?SiJfic' L.: ?
Sr S
, This economic meaning of an international comparison is based
on ,th'e Prebitrii. Pfionl.--rthat:--ac.difidn.try '.dan pdtteith Ydf?ILP?Oditetion
chagiOi? C. ?
kificUSL "arid) SoViei- GNP ts6;-??tifedAured2-'Ld-itdolL-Iate-11,1-ttne:1---'i-
r:Iiiiiiii'ditiraeblim?Pt ion -A: a4: that' :the J-Ignit.ed':Strateb: 2CoiLd ;:sift ttci, thelc-SOVIet'j-
patteiqi .tedid T?sti Lf-lir OA-Ude': jthe'':sanie?--dollAt rof
as b efor c bi? ? th oh? the, -1-L'doilipatiis it; Lrc
approkiinater fL;Lthe'itvtb.'-eerourittleti to-L. -; -3 ? IQ.
pro duc e t1-td.oVt' rifiIxof cotitput) The -- bbrri EO'? VGI1P 's ii tbl?
prices iTS-da tifeASate -:theff) :1r eIat TyeaI5ilit tOlrpt:Odifee-ithei-IUS riii-;)?E)16frici
output,ILlu ,Th:e"-tiCiarititatiVe;:re's)-131-tts-LI-P thAX rther
c?o &Vol; thlp let jt 61:the 'USSR-L:1AM: tbe'dctimpaitil6bn!';11i flail AA/dr-Jab L'?-;
to j-the' 'UtiLite'd :Stat ci..;:efle et: th'e.l'fadVtliatceadh;is.br? 7
equipfedrcto bi?c?tS btki-Afiatt ern 'of: oti-6131A thanhth'at.'O'f othe'cdther b
countr(1q0 :Jr_j_ftutIo !Dth oi 5s1-1::t
ILLEGIB
sfitzczfELJra
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The geometric mean or average of the dollar and ruble compar-
isons is traditionally used when a single number is desired.* Although
the geometric mean may appear to be a confused hybrid of two sets of
relative prices, its economic meaning is as clear-cut as the meaning
of either of the original comparisons. The geometric mean of the two
comparisons of the GNP's of two countries is an approximate measure
o; their relative ability to produce an intermediate mix of output,
midway between the actual mixes of the two countries. Looked at in
this way, the geometric mean provides a measure of the production
capabilities of two countries that is less biased than either of the
comparisons in national prices.
These implicit assumptions are, of course, not entirely real-
istic. The dollar comparison assumes that the relative costs of pro-
ducing the various kinds of output would not change if the United
States tried to transfer resources so as to produce the Soviet mix.
To make such a transfer, however, the United States would have to give
up increasingly large amounts of output in exchange for the output more
characteristic of the Soviet mix. The more the United States tried to
duplicate the Soviet production mix, the more costs of production, in
all probability, would tend to rise. As a result, if the United States
produced the same product mix as the USSR, it would not show up as well
relative to the USSR as it actually does in the dollar comparison made
in this report. Similarly, the ruble comparison assumes implicitly that
the USSR could shift to the production of the US output mix with no
changes in unit costs or prices. Such an outcome would be most unlikely.
Therefore, if the USSR attempted to produce the same output mix as the
United States, the USSR would not appear in as favorable a light as it
does in the ruble comparison shown in this report.
The dollar comparison and the ruble comparison thus overstate
the relative ability of the US and the USSR, respectively, to produce
the Soviet and the US mixes of output, respectively. As already stated,
the traditional resolution of this problem is to use a geometric average
of the two comparisons. It should be noted, however, that in comparisons
of two countries at greatly different states of development, such as the
United States and the USSR, the geometric mean tends to overstate the
relative position of the less advanced country. The reason is that the
more advanced country undoubtedly could shift to a less complicated
product mix with less additional cost than would accrue to the less ad-
vanced country if it were to shift to a more complicated mix.
* The geometric average is used in preference to the arithmetic
because, in general, economic growth and other changes proceed geo-
metrically: that is, constant percentage increases describe the
changes better than constant absolute increases.
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II. Method of Constructing the Comparisons
This report presents a, comparison of GNP and its major end uses in
the United States and the USSR for the years 1955-64. GNP consists of
the aggregate value- of all final sales, including the expenditures of
households on consumption; the expenditures of government for health,
education, administration, and defense; and the expenditures of house-
holds, government, and producing enterprises for gross investment. To
obtain a distribution of GNP by end use, these expenditures are grouped
into four major categories -- consumption, investment, defense, and
administration. Tables 7, 8, 10, and 11 present the estimates of US
and Soviet GNP and its end uses in rubles and in dollars for each of
the years 1955-64.* The comparisons are made in 1955 rubles, because
information on Soviet prices is not available in the necessary detail
for a more recent year, and in 1963 dollars, because 1963 is the most
recent year for which the US data, are available in the required detail.
The general method used was first to calculate Soviet GNP for 1955-64
in constant 1955 rubles and US GNP for 1955-63 in constant 1963 dollars,
with the total GNP for each country broken down into comparable end-use
categories; and second to convert US GNP and its end uses to 1955 rubles
and Soviet GNP and its end uses to 1963 dollars by means of average 1955
ruble/1963 dollar price ratios. These average ratios were calculated
separately for defense, for administration, and for four subcomponents
of consumption (food, nonfood goods, consumer services, and health and
education) and three subcomponents of investment (machinery and equip-
ment, construction, and inventories). The selection of these particular
categories was determined primarily by the availability of US price
indexes for derivation of the 1955 ruble/1963 dollar ratios and for
conversion of US GNP from current dollars to 1963 dollars.
A. Estimation of Gross n-ational, Product and End Uses
Unlike the United States and most other industrialized countries,
the USSR does not publish estimates of GNP. Published Soviet data, are
couched in terms of the Marxian concept of "material product," which
differs substantially from the-Western definition of GNP. Soviet GNP,
therefore, had to be estimated independently from the inadequate published
official statistics and from a, variety of other bits and pieces of in-
formation. The procedure required the laborious calculation of ruble
values for dozens of individual components and their aggregation into
major end-use categories that conform as nearly as possible to Western
definitions. The basic estimates were calculated for the year 1955 in
1955 ruble prices.** For the years 1956-64, the values for the end-use
categories -- consumption, investment, defense, and administration -- in
1955 prices were obtained by use of end-use volume indexes constructed
* Pp. 44, 45, 49, and 50, respectively, below.
** For detailed sources and methods used to estimate Soviet GNP, see
the footnotes to Table 8.
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for the individual components. Estimates of total Soviet GNP in 1955
ruble prices for the years 1956-64, however, were obtained by moving
the 1955 estimate forward by the weighted sum of indexes of GNP by
sector of origin -- industry, construction, agriculture, transportation,
communications, and services. Such an index gives a more accurate
volume indicator of year-to-year change in total GNP than does an index
based on a summation of end-use components because of the inability to
measure accurately (1) inventory change in real terms and (2) net foreign
investment. Although the two indexes do not differ significantly for the
period as a whole, as can be seen in Table 8, the sector-of-origin
approach gives values for total GNP in some years that differ by a, few
percentage points from those obtained by summing the four end-use com-
ponents.
For the United States, estimates of total GNP and its components
in current dollars are published by the Department of Commerce.* The
estimates in current dollars were expressed in 1963 dollars by means of
implicit price indexes for subcomponents of the end-use categories that
can be derived from data given in publications of the Department of
Commerce and the Council of Economic Advisers. The breakdown of GNP by
major end uses as shown. in Table 7, however, differs from that published
by the Department of Commerce, because the data for various subcomponents
of GNP had to be reclassified among the end uses in order to obtain end-
use categories comparable in definition to those permitted by available
Soviet data. The alternative procedure of adjusting .the Soviet data, to
match the US definitions could not be employed, because of the inadequate
detail .of published Soviet statistics. The reclassification of the end-
use categories of US GNP is presented in Table 5, and the derivation of
the subcomponents of consumption and investment is explained in Table 6.**
The definitions of each end use as referred to in this report are dis-
cussed below.
Consumption
This component includes total household expenditures on goods
and services plus government noninvestment expenditures on health and
education. This definition is required for comparability because in the
USSR nearly all outlays on health and education are made by the govern-
ment, While in the United States a significant share of expenditures for
these purposes is made by households.
* The GNP data for the United States are those published prior to the
revision in national accounts made by the Department of Commerce in 1965.
Information on the revisions has not as yet been published in sufficient
detail to permit their use in these comparisons. In any case, the nature
of the revisions is such that the use of the revised series would not
significantly affect the US-USSR comparisons of GNP and its major end
uses.
** Pp. 39 and 42, respectively, below.
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Investment
This component includes gross investment in construction and in
machinery and equipment as well as changes in inventories. It includes
government stockpiling and investment in defense production facilities
but not direct military construction and military equipment purchases,
which are included in defense. Also included in investment for the
United States are expenditures of state and local governments for the
development of atomic energy, net foreign investment, and military
assistance; the latter two items are not included in the figures for
the USSR, however, because of lack of the requisite data to estimate
them. To obtain comparability with the United States, expenditures on
capital repair and civilian research and development, included under
investment in published Soviet statistics, were deducted from Soviet
investment. In the United States these expenditures are included in
current costs (and prices) of other outputs and not as separate final
output.
Defense
The defense category includes (1) pay, subsistence, and other
current operational expenditures of the armed forces (including mili-
tarized security forces); (2) military construction and equipment
expenditures; (3) military research and development (including all
space) expenditures; and (4) atomic energy expenditures. Military
pensions were excluded for both countries because they are merely
transfer payments.
Government Administration
For both countries this category is essentially a, residual of
current government outlays on goods and services not included in the
three categories listed above. The figures for the USSR exclude the
cost of administering state-owned enterprises because these overhead
costs of enterprise management are included in product prices and
appear, as in the US accounts, in the value of the final uses to which
these products correspond. The estimates for the USSR, however, do
include expenditures by the Communist Party, which serves as a key arm
of government administration and control; also included are expendi-
tures for nonmilitarized internal security activities, some of which
have no counterpart in the United States.
B. Derivation of Ruble/Dollar Ratios
Having obtained estimates of GNP by end use for the two coun-
tries that are comparable in definition -- one for the United States
in 1963 dollars and the other for the USSR in 1955 rubles -- it is
then necessary to express the estimates in a common currency in order
to Measure the relative positions of the two countries. The next step
in the derivation of the comparison, therefore, was to obtain two sets
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of appropriately weighted, average ruble/dollar price ratios, one set
with US weights for converting Soviet GNP by end use into dollars and
the other set with Soviet weights for converting US GNP by end use
into rubles.* The desired ratios were derived in three steps: (1) basic
ratios for 1955 were calculated as accurately as possible with available
data, for the four subcomponents of consumption and the three subcom-
.ponents of investment previously listed, for defense, and for administra-
tion; (2) these 1955 price ratios were converted to 1955 ruble/1963
dollar ratios by dividing them by appropriate US price indexes; (3) for
reasons that will be explained below, certain of these basic ratios were
raised arbitrarily to correct in part for known biases in the data,.
The derivation of the final ratios is shown in Table 9.**
1. Calculation of the Basic Ratios
For consumption and for investment, the prices of a, repre-
sentative sample of presumably identical goods and services in the two
countries were collected for the year 1955 (when the most information
for the USSR is available), and a ruble/dollar price ratio was computed
for each product or service by division; the ratios for the individual
products and services were then grouped into subcomponents -- four for
consumption and three for investment -- and two average ratios for each
subcomponents were computed by weighting the individual ratios by the
value of sales in 1955 in each country; and these average ruble/dollar
ratios for 1955 were then converted to 1955 ruble/1963 dollar ratios by
dividing them by appropriate US price indexes. For defense, the ruble/
dollar ratios were derived as a, byproduct of the calculation of defense
expenditures as a component of GNP in the USSR. These expenditures
were estimated for 1955 by valuing the various components of Soviet
military programs both in 1955 rubles and in 1963 dollars. For the
years 19 56-64, dollar and ruble valuations were obtained by moving the
1955 estimates forward by physical volume indexes. Ruble/dollar ratios
for defense as a, whole and for individual components in each year were
derived from these valuations by division. US defense expenditures in
dollars were similarly estimated for individual components, and converted
to rubles using the ruble/dollar ratios obtained in the valuation of
Soviet programs. For administration, the ruble/dollar ratio is based on
a single comparison -- namely, the average annual wages of employees in
government administration in the two countries in 1955, converted to
1955 rubles and 1963 dollars by dividing the ratio for 1955 by an index
of average wages of government employees in the United States.
2. Adjustment of Certain Ratios
In deriving the final ratios used to convert the end uses
of US and Soviet GNP to common currencies, several of the basic ratios
* For a, more detailed explanation of the derivation of the basic ruble/
dollar ratios, see Appendix A and the footnotes to Table 9, p. 47, below.
** P. 46, below.
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derived as described above were raised arbitrarily. The adjustment of
these ratios represents an attempt to allow, albeit in an arbitrary
manner, for a bias in the data, that cannot be measured precisely but
that tends to overstate the position of the USSR relative to the United
States. In other words, it is an allowance for a, known bias in a known
direction, but of unknown size, in the comparisons as measures of
relative production capabilities of the two countries. The adjustment
is preliminary and necessarily imprecise, but is regarded as minimal in
the sense that a correct adjustment arguably could be much larger but is
not very likely to be smaller. The considerations underlying the adjust-
ment are both general, relating to the nature and meaning of the basic
data, themselves, and specific, relating to the rationale for adjusting
the individual ratios.
a. Uncertainties and Biases in the Data,
Each step of the calculations described in the sections
above involves inadequate data. In assessing these calculations and the
nature of the Soviet data, involved, the most illuminating hypothesis to
be borne in mind is "Murphy's lam' -- whatever can go wrong will go
wrong. Because of the nature and shortcomings of national income data
published by the USSR, an estimate of Soviet GNP must be pieced together
from announced budget and expenditure data, that are incomplete, incon-
sistent, and only dimly understood. For example, in the Soviet national
budget for 1963, 8 billion rubles (9 percent of the total) were simply
unidentified as to purpose. This amount had to be allocated somehow or
other between final product expenditures and transfers or disguised
subsidies to producing enterprises. Furthermore, farm income in kind,
a, large part of consumption, must be quite independently estimated, and
the data, with which to do this are extremely meager.
The skimpiness of Soviet announced data, however, is
perhaps less serious a problem than is interpretation of the.nature of
the economic activities that the data, purport to measure. This report
seeks to compare the values of the final products of the two economies.
However, what are final products in the USSR is far from obvious. This.
question arises (1) in the accounting sense -- what sales are sales to
final users -- and (2) in the physical sense -- what are the exact goods
and services which these sales consist of. An indispensable auxiliary
question is -- at what prices are these goods and services actually
entered into the reported sales. A centrally planned economic system
shapes the answers to these questions quite differently from a market
system.
The scarcity and the ambiguous character of Soviet ex-
penditure data, for the most part imply a margin of error that may fall
in either direction. In other words, the estimate of Soviet GNP in
rubles has a range of uncertainty, which, however, is probably small.
The estimates in this report agree fairly closely with independent cal-
culations made by several Western students of the Soviet economy.
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Although the estimate- of Soviet GNP in rubles is considered to be
reasonably satisfactory, the same cannot be said for the basic ruble/
dollar ratios. Every attempt was made to match products in the two
countries as exactly az?possible, but the data problems encountered in
the attempt are such as to produce ruble/dollar ratios that clearly
overstate the value of Soviet output compared with US output. These
problems relate primarily to the physical composition of the outputs
(individual products) being compared. Following are illustrations of
just a few of these problems. In calculating the ruble/dollar ratios
for individual durable goods, it was necessary in many instances to
match Soviet products with US equivalents that are obsolete; in other
instances, Soviet products had to be matched with superior US models.
Moreover, the quality of workmanship and the product durability of
Soviet products were assumed to be those of the listed specifications,
whereas actual performance is known to be greatly inferior to norms
and standards. Furthermore, many types of equipment sales in the
United States are accompanied at no extra, charge by a warranty, initial
troubleshooting services, training of operators if need be, and help in
planning the most efficient integration of the equipment into the produc-
tion process.* These auxiliary services are usually missing or ignored
in. the USSR, and their absence makes otherwise identical physical products
different, less costly, and less useful. To some degree all these prob-
lems imply that the Soviet goods are inferior to the US counterparts and
therefore that their equivalent dollar cost is less than shown by their
ruble/dollar ratios. These problems are present also in the comparison
of construction in the two countries.
The overall mix and pattern of Soviet production also
leads to a sample bias in favor of the USSR. Soviet planners have con-
centrated on the mass production of a, relatively small list of simple
general-purpose goods -- three or four models of cars, standard machine
tools, small uniform apartments rather than single-family urban houses,
and so on. The absence of diversity of models and of a variety of
specialty equipment is characteristic in the Soviet mix of producers'
durables.** Ruble/dollar ratios based only on such standard items
clearly are inadequate indicators of the relative ability of the two
* With respect to producers' equipment, however, it should be noted
that since the prices compared in this report Li are f.o.b. producer's
station, net of packing, auxiliary services are not explicitly in the
US price, although some may be included implicitly. Their exclusion
would be another example of sample bias discussed below. The same can
be said of transportation and distribution charges, which are excluded
from the price comparison, and which evidently are a larger percent of
purchasers' prices in the US than in the USSR. This raises the supposi-
tion that these are more useful but costly services which are being
neglected or inadequately performed in the USSR.
** The sample of products used to derive ruble/dollar ratios thus is
necessarily limited almost exclusively to standardized, mass-produced
items, and does not take account of the variety of specialty equipment
that looms large in the US product mix and that would be very costly to
produce in the USSR.
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industries to produce. This bias is reinforced by the nature of the
available sample of Soviet prices, which consists almost entirely of
shelf items; prices for such special-purpose items as were produced
are unavailable.
One final problem occurs in the use of costs (wages and
materials) to measure the value of output of services in education,
health, and government administration. In the USSR these costs consist
largely of wages and salaries. The basing of ruble/dollar ratios on a.
comparison of average wages, as. is done in this report, assumes equal
productivity of labor in the two countries and thus clearly overstates
the output of services in the USSR relative tothe United States.
b. Justification for Raising Individual Ratios
The statistical problems stemming from the deficiencies
of data described above are insoluble by the analyst making these com-
parisons. The data, upon which to base precise adjustments for quality,
longevity, diversity, and the mix of output are not available. Those
aspects of incomparability of products that could reasonably be allowed
for have already been taken into account in calculating the basic ruble/
dollar ratios. The problem that remains is to allow for a bias of known
direction (in favor of the USSR) but of unknown size. The solution
adopted here is to raise the ruble/dollar ratios most affected by the
biases by an arbitrary, uniform 20 percent. The ratios are (1) in
consumption, the ratios for radio and television equipment, electrical
and other appliances, and automobiles in the subcomponent nonfood goods,
and the wage component of the subcomponent health and education; (2) in
investment, the ratios for machinery and equipment and for construction;
and (3) the ratio for government administration. (For a. comparison of
original and adjusted ratios, see Table 9.*)
With respect to consumer durables, the difficulties of
matching Soviet and US products were such as to impart a, consistent
downward bias to the ruble/dollar ratios.** In general, Soviet durables
such as automobiles, washing machines, and refrigerators resemble models
produced in the United States before World Wax II. Soviet products had
to be compared, for the most part, with the cheapest US models, and even
these were generally superior to the Soviet goods in appearance, work-
manship, and operating features of one kind or another. Left out of the
comparison entirely, for lack of Soviet counterparts, were the bewilder-
ing varieties of modern durables available to US consumers -- such as
fully automatic washing machines, clock-radios, dryers, and the like --
which would be relatively high-cost products in the USSR. Although
comparative measures of longevity and durability are not available, it
* P. 46, below.
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is clear from the number of complaints in the Soviet press about short
service life, constant breakdowns, and unsatisfactory repair services
that US consumer durables far outlast their Soviet counterparts. By
way of illustration, the press reports that in a, recent year 16,000
refrigerators of a, certain model were delivered to Moscow customers,
and 1,3,000 calls for repairs on these models were made within a, short
period of time. J The Soviet press also provides much evidence that
Soviet radios and television sets are inferior to US products in
reliability and general performance. V
With respect to machinery and equipment the evidence
available from the Soviet press and from the reports of foreign observers
and users of Soviet products shows clearly that their quality is far
inferior to that of producers' durables in the United States. This evi-
dence is cited in detail in a, series of reports by this Office dealing
with individual industries. Soviet jet aircraft engines have a short
service life compared with those in the United States .Y; all models of
tractors and grain combines are underpowered 21; the service life of
some kinds of pumps used in the chemical industry is measured in hours,
and the springs and valves in some types of compressors must be replaced
every week; and Soviet-produced tires average from one-half to two-
thirds fewer miles of wear than US tires. 110/ In recent years, Western
engineers have been able to observe a, wide variety of Soviet construction
equipment in use in underdeveloped countries; their over-all assessment
has been that it is generally less efficient, less durable, and more
difficult to operate than Western equipment. A recent US delegation to
the USSR concluded that Soviet machine tools continue to be less durable,
more prone to breakdown, slower, and less precise than US machine
tools. 11/ The experience of underdeveloped countries that have imported
Soviet equipment provides additional evidence. Thus the teeth of shovels
sent to Turkey wore smooth after 70 to 80 hours of excavation; tractors
in Iraq required major overhaul after 500 hours of operation compared with
2,000 hours for Western tractors; in Burma, bulldozers and scrapers became
inoperable after a, few weeks of use, and mechanical problems were chronic
with jeeps, trucks, generators, and loading cranes; in Cuba, blades of
bulldozers broke at the slightest strain, 3 out of 10 bulldozers allegedly
failed in the first 50 hours of operation, and in one province 80 out of
120 tractors broke down in less than 2 months; and in Egypt and Afghan-
istan, serious deficiencies in durability and operation were experienced
with respect to -a, wide range of heavy construction equipment. 12./
In addition to inadequate allowances for quality differ-
ences, the ruble/dollar ratios are biased downward because they do not
take into account the Soviet inability to produce efficiently the com-
plex and special types of equipment that are very important in the US
product mix but are not represented at all in the sample of ruble/dollar
ratios. The possible magnitude of this bias may be illustrated by the
results of a, recent study of the costs of Khrushchev's chemical pro-
gram. 12/ This study compares the ruble cost of building the planned
capacities for fertilizers, plastics, and synthetic fibers with a cal-
culated dollar cost of the same capacities and yields a. ruble/dollar
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ratio of 1.5 to 1 compared with a, ratio of 0.5 to 1 for all industrial
investment based on the sample of products used in this report.
The low quality of Soviet construction is well known
both to the Soviet citizens themselves and to Western observers. The
evidence is summarized in a series of reports by this Office.1.)?/ The
Soviet press itself in words and photographs provides the best source
for a judgment as to the comparative quality of US and Soviet con-
struction. The problems range from poor materials -- large percentages
of broken bricks, poor cement (20 percent below US quality standards),
and excessive breakage of window glass -- to poor construction work --
bad finish, plumbing, and wiring and frequent structural failures and
collapses. A delegation of construction experts that visited the USSR
recently concluded that Soviet construction was "unbelievably" bad; one
member of the delegation stated that with few exceptions the construction
projects that they saw would not pass inspection in the US. So shoddy
was the work in many buildings that a great deal of expensive repair and
replacement would be needed to keep them habitable.
In the case of administration and of the wage component
of health and education services the adjustment of the ruble/dollar
ratios represents an allowance for differences in the productivity of
labor in the two countries. For both categories, outputs are measured
in terms of inputs, largely labor, and the ruble/dollar ratios are mainly
wage ratios. This procedure assumes equal productivity -- that is, equal
quality of these inputs -- clearly an incorrect supposition. The physical
capital equipment available to US workers in health, education, and govern-
ment exceeds that available to their Soviet counterparts probably by a
large margin. In addition, the average educational levels of the two
groups are quite different. The average US worker employed in health
services had (in 1959) 11.5 years of schooling, compared with 9.0 years
for the average Soviet worker in that field. For workers in the field
of education the corresponding achievements are 15.2 and 10.4, and in
government administration they are 11.5 and 8.5. Although direct meas-
ures of relative productivities cannot be made for these services, some
notion of the probable magnitude of the difference is given by the fact
that in industry, output per worker in the USSR is only about one-third
of that in the United States and that in the economy as a whole, as
measured by GNP per person employed, productivity is only about 30 per-
cent of the US level. Finally, with respect to administration it should
be noted that the ruble/dollar ratio does not include a materials com-
ponent because of lack of the necessary data. Inclusion of materials
would raise the average ruble/dollar ratio considerably, as was the case
in the calculation of the average ratio for health and education.
3. Final Ruble/Dollar Ratios for Gross National Product
and End Uses
The adjusted 1955 ruble/1963 dollar ratios for the subcom-
ponents of consumption and investment, for defense, and for administra-
tion were then used to convert each of these components of US and Soviet
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GNP to rubles and to dollars, respectively, for each year during 1955-64'.
Total values for consumption, for investment, and for GNP as a. whole
(United States in rubles and USSR in dollars) in each year were obtained
by addition of the appropriate components. Finally, ruble/dollar ratios
for consumption, investment, and total GNP were calculated from the cor-
responding ruble and dollar values for tne two countries.
The US-weighted and Soviet-weighted ratios, together with
their geometric averages, for GNP and .for each end use are shown for
illustrative purposes in Table 12.* These average ruble/dollar /ratios
are the result of weighting appropriate subcomponent ratios separately
for each year in the comparison by their respective shares in GNP in each
year. An alternative procedure would have been to carry out the conver-
sion using base-year weights (1955). The use of given-year weights, in
fact, makes little difference. The geometric average of the two ratios
for consumption declines slightly -- from 0.92 with 1955 weights to
0.90 with'1964 weights. The geometric average of the ratios for invest-
ment also declines a little (from 0.65 to 0.64). The ratio for defense
is the most sensitive to the weights used, with the geometric average
ranging from 0.33 using 1955 weights to 0.39 using 1964 weights. The
ratio for administration remains constant at 0.21. The overall ratio
for total GNP varies by only two one-hundredths as the weights change
over time.
In any given year, however, the Soviet-weighted and US-
weighted ruble/dollar ratios for GNP and for most of the end uses differ
greatly. The extent of this difference between the two ratios varies
considerably among the components, being greatest for consumption and
least for defense. Among the subcomponents of consumption and invest-
ment the largest differences in the Soviet and US-weighted ratios are
for health and education (0.24 compared with 0.57) and for machinery
and equipment (0.39 compared with 0.71). In the case of health and
education the large difference results from greatly different combi-
nations of factor inputs in the two countries: in these fields the
USSR, compared with the United States, uses more labor, which is rela-
tively low paid in the USSR, and less materials, which are relatively
high priced there. With respect to machinery and equipment the large
difference in the two ruble/dollar ratios results from the great
divergence in relative prices and pattern of output for producers'
durable equipment in the United States and the USSR and the inverse
correlation between the output ratios of the two countries and the
corresponding price ratios. For example, the United States outpro-
duces the USSR by far in automobiles, the ruble prices for which are
high relative to US prices. On the other hand, the production of
machine tools is relatively more important in the USSR than in the
United States, but the ruble prices for machine tools are lower
relative to dollar prices.
* P. 51, below.
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III. Comparisons of Relative Size of US and Soviet Gross National Product
and Major End Uses, 1955-6J?
A. Comparative Size of Total Gross National Product
The final percentage comparisons of GNP in the United States and
the USSR for the period 1955-64 are presented in Figure 2 and Table 1.
The table gives three percentage comparisons: one is obtained when the
GNP's of both countries are valued in rubles, another is obtained when
the GNP's are valued in dollars, and the third is the geometric average
of the ruble and the dollar comparisons. The ruble and dollar values
are shown in Tables 7, 8, 10, and ll.* According to the data in Table 1,
Soviet GNP in 1955 was less than one-third the US level when measured
in rubles and a little less than one-half the US level when measured
in dollars; the geometric average shows Soviet GNP to be somewhat less
than two-fifths of US GNP. Soviet GNP increased rapidly in size rela-
tive to that of the United States during 1956-58, lost ground in 1959
and 1960, increased to a high of 46 percent (geometric average) of US
GNP in 1961, and then declined slightly in relative size during 1962-64.
Thus Soviet GNP has not gained on US GNP since 1958. In 1964, Soviet
GNP was 36 percent of the US level by the ruble comparison and 56 per-
cent of the US level by the dollar comparison; the geometric average
is 45 percent. On a per_capita basis, Soviet GNP is a smaller percent
of US GNP than when total GNP's are compared. In 1955, Soviet per
capita GNP was slightly more than two-fifths the size of US per capita
GNP in dollar prices and about one-fourth as large in ruble prices.
Soviet per capita GNP increased in size relative to the US over the
period 1955-64, except for slight declines in 1959 and 1962. By 1964,
Soviet per capita GNP was nearly 48 percent of the size of US per capita
GNP at dollar prices and about 31 percent as large in ruble prices.
In the geometric average comparison, Soviet GNP on a per capita basis
was 32 percent of US per capita GNP in 1955 and 38 percent of US per
capita GNP in 1964.
From an analysis of the average annual rates of growth of US
and Soviet GNP in 1956-64, shown in Table 2, it is clear that the sub-
stantial increase in the relative size of Soviet GNP in the period
1956-58 is largely attributable to a considerable decline in the US
growth rate rather than to any substantial acceleration in the Soviet
rate, which was quite high during the three years. The decrease in
comparative size of Soviet GNP in 1959-60 was due to both a substantial
slowdown in the rate of growth of Soviet GNP and a considerable acceler-
ation of the US growth rate after 1958. During the five years, 1960-64,
Soviet GNP increased slightly as a percent of US GNP, because, although
the Soviet growth rate continued to decline, the rate of growth of US
GNP declined somewhat more.
* PP. 44, 45, 49, and 50, respectively, below.
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Table 1
a Percentage of US Gross National Product
1955-64
USSR as a Percent of US
Gross national product
Ruble comparison
Dollar comparison12/
Geometric average comparison f./
Consumption
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
29.4
48.4
37.7
31.0
49.5
39.2
32.0
50.3
40.1
35.9
55.3
44.6
34.6
53.3
42.9
35.4
54.3
43.8
37.2
56.7
45.9
36.3
55.7
45.0
35.8
55.3
44.5
36.2
56.4
45.2
Ruble comparison Li
25.3
26.1
27.3
28.8
28.5
29.0
29.8
29.8
29.4
29.0
Dollar comparison 12/
*s./
39.4
39.6
41.4
43.1
43.0
43.5
45.0
45.5
45.3
45.3
Geometric average comparison
31.6
32.1
33.6
35.2
35.0
35.5
36.6
36.8
36.5
36.2
Investment
Ruble comparison a/
31.9
37.5
44.1
59.7
55.6
56.2
61.4
57.9
58.7
61.6
Dollar comparison Li
40.0
47.4
55.3
74.7
69.7
71.0
77.8
74.5
76.1
79.8
Geometric average comparison L/
35.7
42.2
49.4
66.8
62.3
63.2
69.1
65.7
66.8
70.1
Defense
Ruble comparison L/
96.9
91.9
80.9
82.7
82.6
85.7
80.3
79.8
79.2
81.5
Dollar comparison12/
116.0
108.1
93.2
93.7
91.7
93.8
86.3
84.4
82.5
85.1
Geometric average comparison _c./
106.0
99.7
86.8
88.0
87.0
89.7
83.2
82.1
80.8
83.3
Administration.d/
Dollar comparison b/
76.5
81.9
79.2
68.7
71.4
71.0
72.6
72.2
70.1
66.3
a. Ruble values of Soviet expenditures in Table 8, p. 45, below, divided by the ruble values of US
expenditures in Table 10, p. 49, below, and the quotient expressed as a percent.
b. Dollar values of Soviet expenditures in Table 11, p. 50, below, divided by the dollar values of
US expenditures in Table 7, p. 44, below, and the quotient expressed as a. percent.
c. The geometric mean of the ruble and dollar comparisons.
d. Only the dollar comparison is presented; the ruble comparison would be the same because the
Soviet-weighted and US-weighted ruble/dollar ratios used for administration are identical.
a
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,
US and USSR: Gross National Product
1955-64
?-:
*Geometric average comparison
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Table 2
US and USSR: Average Annual Rates of Growth
of Gross National Product, by End Use 2/
1956=64
Percent
u)
1
b.j
1
c)
1
w
1
tt
1
'-
Gross national product
United States
USSR
Consumption
United States
USSR
Investment
United States
USSR
Defense
United States
USSR
Administration
United States
USSR
1956-64
12/
1956-58
12/
1959-60
12/
1961-64
12/
1956
1957
1958
1959
1960
1961
1962
1963
1964
3.1
5.5
3.5
4.8
2.2
9.9
1.4
0.8
3.8
2.1
1.0
7.5
2.5
5.9
-5.1
16.6
0.7
-2.9
4.9
1.1
4.7
4.3
4.8
5.0
8.8
5.8
-0.9
2.4
-0.2
1.7
3.9
4.6
3.7
3.8
4.7
7.1
3.0
2.7
5.0
3.1
3.3
8.3
4.9
6.3
1.6
19.0
-1.8
-5.1
-3.3
3.4
1.2
4.7
1.4
6.3
-1.9
15.2
5.9
-5.4
3.4
0
-1.5
9.4
1.3
5.0
-14.4
15.5
-1.7
2.1
15.3
o
7.0
4.0
5.6
5.3
18.9
11.7
1.7
2.8
-3.8
o
2.4
4.6
4.0
4.6
-0.5
0.2
-3.4
2.0
3.4
3.3
1.5
6.1
1.3
3.8
-0.5
8.4
6.2
0.7
4.3
6.5
6.2
3.6
4.9
5.2
10.5
4.7
9.1
9.9
3.7
3.0
3.1
1.7
3.6
2.1
2.6
3.6
0.4
1.2
3.1
o
4.8
6.9
5.1
4.3
6.8
11.9
-3.4
-0.6
9.0
2.9
a. US growth rates are calculated from the 1963 dollar values in Table 7, p. 44, below;the Soviet growth rates are calculated
from the 1955 ruble values in Table 8, p. 45, below. The growth rate of Soviet GNP is based on the sector-of-origin series
rather than on the sum of the end-use components.
b. The base year for calculating the average annual rat-: of growth is the year preceding the initial year of the given
period.
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B. Comparative Size of Major End Uses of Gross National Product
The relative sizes of the US and Soviet economies differ con-
siderably in regard to the major end-use components of GNP, as shown
by the dollar, ruble, and geometric average comparisons of consumption,
investment, defense, and government administration presented in Table 1
(see also Figure 3). The relative positions of the several end uses
in the USSR vis-?a-vis the United States also have changed markedly over
the comparatively short period 1955-64. Thus, whereas in 1955 Soviet
consumption and investment both were in the neighborhood of one-third
that of US levels, by 1964 investment had risen to more than two-thirds
of that of the United States, but consumption was still not far from
one-third that of the United States. In contrast, the relative
positions of defense and administration declined, the former consider-
ably more rapidly than the latter. On the whole, these trends in the
relative positions of the four end uses have proceeded fairly smoothly
over the period, although there have been sharp changes in some years
in one or another of the components.
Soviet consumption was about one-fourth of US consumption in
1955 at Soviet prices and about two-fifths at US prices. During the
next eight years, Soviet consumption increased only slightly faster
that US consumption and by 1964 was 29 percent of US consumption at
Soviet prices and 45 percent at dollar prices. In the geometric
average comparison, Soviet consumption was 32 percent of US consump-
tion in 1955 and 36 percent in 1964; the corresponding percentages on
a per capita-basis are 27 and,31: The largest increase in the relative
size of Soviet and US consumption occurred in the period 1956-58. In
1959 the relative size of Soviet consumption declined slightly from the
previous year, then increased again moderately during 1960-62 and de-
clined slightly in 1963 and 1964. The annual rates of growth of US
consumption expenditures are quite steady for the period 1955-64, so
that the slowdown in the gain in relative size of Soviet consumption
during the latter years of this period is due almost entirely to a
decrease in the rate of growth of Soviet consumption.
Although Soviet consumption as a whole. approached two-fifths
of the US level in 1964, total expenditures of private households on
goods and services were less than a third of those of US consumers;
expenditures on health and education in the USSR (largely by the
government), however, approached two-thirds of outlays on these
services in the United States. Private household consumption in the
USSR gained slowly relative to the United States between 1955 and
1964, but expenditures on health and education relative to those in
the United States declined slowly between 1955 and 1959 and then rose
again to occupy in 1964 the same relative level as in 1955
The size of Soviet total investment relative to that of the
United States changed markedly during 1955-64. In 1955, Soviet
investment was about a third the size of US investment at ruble
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0,0_10,4 196
600
400
300
200
100
3 US $
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Figure 3
US and USSR: Major End Uses of Gross National Product
1955, 1958, and 1964
5 1958 1964
19
CONSUMPTION
52300 2-66 CIA
1964
1958
1955 gs-rtviEw
iNv-
1955
DEFENsE
1950
1964
*Geometric overage comparison
196
1955 1958
ADMINISTRATION
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prices, two-fifths as large at dollar prices, and nearly 36 percent
as large according to the geometric average. In the period 1955-58,
Soviet investment as a percent of US investment almost doubled, and
in 1958 Soviet investment was nearly three-fifths of US investment at
ruble prices and three-fourths of US investment at dollar prices, the
.geometric average being two-thirds. The relative size of Soviet in-
vestment declined in 1959 and then rose to 69 percent in 1961, de-
clined in 1962, and rose again in 1963 and 1964, when its relative
position was only a little higher than in 1958. The spectacular
increase in the relative size of Soviet investment during 1956-58
resulted from a very high rate of growth of Soviet investment expendi-
tures (nearly 17 percent annually) and from an actual decrease in US
investment. The much smaller increase in the relative size of Soviet
investment during 1959-64 was due to a substantial decline in the
rate of growth of Soviet investment expenditures (approximately 7 per-
cent annually) and to an increase in the growth rate of US investment.
The spread between the ruble and dollar comparisons for investmenu is
smaller than that for consumption, indicating less difference in the
Soviet and US price structures and output mixes for investment goods
than for consumption goods.
Comparisons may also be made with respect to fixed investment,
which makes up 85 to 90 percent of total investment in botn countries.
It represents the outlay on new plant and equipment and is calculated
as the sum of construction and machinery and equipment. In most years,
Soviet fixed investment is somewhat larger relative to US fixed invest-
ment than is Soviet total investment relative to US total investment,
but the general trends and relationships are about the same for the
two measures of investment.
The estimated size of Soviet defense expenditures relative to
US defense expenditures declined significantly during 1955-64. As
measured by the geometric average of the ruble and dollar comparisons,
Soviet expenditures were 6 percent greater than US expenditures in
1955, but by 1964 the Soviet defense effort was only a little over
four-fifths the size of that of the United States. The relative size
of Soviet defense expenditures decreased sharply in 1956 and 1957,
as a result of their absolute decline in these years, and in 1957
Soviet expenditures had fallen to less than nine-tenths of US expendi-
tures. During 1958-60, Soviet defense expenditures rose slightly
relative to those of the United States, but declined thereafter. In
this period, Soviet defense expenditures rose, but US expenditures
rose faster. Over the eight-year period the difference between the
percentage comparisons in rubles and in dollars narrowed substantially,
reflecting the fact that the Soviet and the US mixes of defense
expenditures have become much more alike. The USSR has shifted more
and more from a manpower-intensive defense effort to an increasingly
sophisticated and relatively expensive modern weapons program.
Soviet defense expenditures relative to those of the United States
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decreased considerably more slowly according to the ruble comparison
than according to the dollar comparison. This difference indicates
that defense costs in rubles are rising at an increasing rate vis-?a-vis
the United States, as the USSR shifts more and more toward an output
mix in which its competitive advantage is less.
Inasmuch as the US-weighted and Soviet-weighted ruble/dollar
ratios for government administration are the same, comparisons in
rubles and in dollars are the same. Over the period 1955-64 as a whole,
Soviet expenditures declined relative to US expenditures, but there
were marked fluctuations within these years. In 1955 Soviet expendi-
tures for administration were three-fourths of US expenditures. The
proportion rose to four-fifths in 1956, declined to about two-thirds
in 1958, rose to nearly three-fourths in 1961, and declined again to
two-thirds in 1964.
C. Comparative Size of National Policy Expenditures
Table 3 and Table 13* and Figure 4 present estimates of the
comparative size of US and Soviet outlays in 1_955-63** on several
strategic components of GNP-which may be grouped under the rubric of
national policy expenditures. They include education, industrial
investment, civilian research and development, foreign aid, and
defense. Such a comparison assesses the relative position and progress
of the USSR vis-1.-vis the United States in areas that directly reflect
the declared policies of the USSR -- the achievement of rapid economic
growth, especially in industry, and the promotion of foreign policy
objectives through foreign aid and an expanding defense establishment.
Comparative expenditures on the first three components --
education, industrial investment, and civilian research and develop-
ment -- reflect, in general, the relative commitment of the two
countries to the maintenance of and increase in present rates of
economic growth. Comparative outlays on education represent com-
parative investments in raising the average level of education of
the labor force, an important factor in the rise of labor productivity
that contributes to economic growth in modern industrial societies.
Similarly, comparative expenditures on that part of investment
allocated to the expansion of industrial plant and equipment show the
willingness of the two countries to allocate present resources to
achieve future growth; future power positions of the two countries
will depend in part on such present resource allocations. Finally,
a comparison of outlays on civilian research and development is
useful for assessing the potential for growth that will ensue from
technological improvements and new inventions.
* P. 52, below.
** The detailed data needed to calculate national policy expenditures
for 1964 are not available.
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60
so
40
30
20
10
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1963 uS
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US and USSR: National Policy Expenditures
1955, 1958, and 1963
Figure 4
1933 1956 1963 1955 1963
1958
DEFENSE INDUSTRIAL. INVESTMENT
52301 2-66 CIA
1955EDUCI9A5T0N AN
81 9 CiViLJAN RESEARCH
195S 1966 1963
D DEVEL.OPMENT
1955 1 1963
959
FOREIGN AID
*Geometric average comparison for defense, industrial investment, and education;
dollar comparisons for civilian research and development and foreign aid.
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Table 3
Soviet National Policy Expenditures as a Percentage of US National Policy Expenditures
1955-63
USSR as a Percent of US
o)
1
ti
1
c)
1
W
1
I-xi
1
E3
National policy expenditures
Dollar comparison 2/
Education
Ruble comparison12/
Dollar comparison 2/
Geometric average comparison 2/
Industrial investment
Ruble comparison12/
Dollar comparison 2/
Geometric average comparison
Civilian research and development 1/
Dollar comparison 2/
Foreign aid 2/
Dollar comparison 2/
Defense
Ruble comparison12/
Dollar comparison 2/
Geometric average comparison 2/
1955
1956
1957
1958
1959
1960
1961
1962
92.2
53.6
100.5
73.4
58.3
68.3
63.1
30.8
9.2
96.9
116.0
106.0
87.4
55.4
100.0
74.4
58.3
70.2
64.0
28.6
7.3
91.9
108.1
99.7
82.9
58.3
103.3
77.6
59.4
73.6
66.1
29.4
15.5
80.9
93.2
86.8
89.8
55.5
98.3
73.9
86.7
106.2
96.0
34.0
12.7
82.6
93.7
85.2
93.0
58.3
99.2
76.0
99.2
123.3
110.6
37.5
10.0
82.6
91.7
67.0
95.3
61.7
101.6
79.2
99.3
123.2
110.6
38.7
17.6
85.7
93.8
89.7
93.8
64.o
L06.1
82.4
105.4
127.7
116.0
44.4
18.5
80.3
86.3
83.2
94.9
68.8
110.6
87.2
108.1
130.6
118.8
47.0
27.1
79.8
84.4
82.1
95.2
70.7
111.4
88.7
109.2
133.3
120.6
52.9
23.0
79.2
82.5
80.8
a. The dollar values of Soviet expenditures divided by the dollar values of US expenditures from Table 13, p. 52, below.
b. The ruble values of Soviet expenditures divided by the ruble values of US expenditures from Table 13.
c. The geometric mean of the ruble and dollar comparisons.
d. Only the dollar comparison is presented. The ruble comparison would be the same because the Soviet-weighted and US-weighted ruble/
dollar ratios used for civilian research and development are identical.
e. Available data do not permit the making of a ruble comparison.
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Along with a large and graying investment in physical capital
relative to the United States, the USSR has been devoting impressive
amounts of resources to the development of its human capital. In 1963,
with a GNP less than half that of the United States, the USSR spent
nearly nine-tenths as much as the United States on education, including
both current expenditures on wages and materials and the cost of con-
struction of new educational facilities. As shown by the geometric
average comparison, the Soviet relative position rose steadily over the
period, from 73 percent of the US in 1955 to 89 percent in 1963. By
the dollar comparison, Soviet expenditures on education exceeded those
of the United States in both years. Expenditures on education are a
much larger share of total consumption in the USSR than in the United
States. In 1963 they represented 18 percent of the total in the USSR
when measured in dollars, compared with 6 percent in the United States;
the corresponding percentages are 7 and 3 when measured in rubles.
With this investment effort the USSR raised the median number of years
of schooling of its population by nearly one-half, from nearly 3.5
years in 1955 to about 5 years in 1963. The average educational attain-
ment of the US population, however, was nearly 11.5 years in 1963.
The relative size of investment allocations by the USSR to the
industrial sector of its economy increased spectacularly during 1955-63,
a bit more rapidly than for investment as a whole. According to the
geometric average comparison, Soviet industrial investment was 63 per-
cent of that of the United States in 1955, but by 1958 it almost equaled
that of the United States, and in 1963 it was 21 percent greater.
Soviet industrial investment has exceeded US industrial investment since
1961, whether measured in rubles or in dollars. The emphasis that the
USSR gives to the development of its industrial sector is shown even
more strikingly by the fact that industrial investment in the USSR is
twice as large a share of total investment as in the United States.
Thus when measured in dollars the USSR in 1963 allocated nearly 40 per-
cent of total investment to industry, whereas the United States devoted
a little over 23 percent of the total to that sector.
In 1955, Soviet expenditures for civilian research and develop-
ment were less than one-third those of the United States, but by 1963
they were a little over one-half of US expenditures. The relative
size of Soviet civilian research decreased slightly in 1956 and 1957
but rose again in the period 1958-63. The US-weighted and Soviet-
weighted ruble/dollar ratios for civilian research are equal, so that
the comparative size of US and Soviet expenditures is the same, whether
valued at dollar prices or ruble prices.
A discussion of the relative size of US and Soviet defense
expenditures appears in the preceding section. With respect to foreign
aid, the USSR has improved its position vis--vis the United States to
a greater extent than for any other of the national policy expenditures,
but the relative size of this component is also by far the smallest.
In 1955, Soviet foreign aid was less than one-tenth as large as US
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foreign aid, but by 1963 it had increased to almost one-fourth the size
of US aid. Soviet foreign aid expenditures increased greatly relative
to US expenditures in 1957, declined in 1958 and 1959, rose sharply
during the next three years to a peak of 27 percent in 1962, and then
decreased to 23 percent in 1963. The comparison is made in dollars,
because the data necessary to construct a ruble/dollar ratio for
foreign aid are not available.
A whole host of qualifications attaches to the comparisons
of expenditures on foreign aid in the two countries. In the first place,
the estimates could be made only in current dollars, because of the
lack of an appropriate price index to convert them to 1963 dollars.
Dollar figures for Soviet foreign aid had to be pieced together from
a variety of sources of varying reliability and do not include military
aid to Communist countries. Moreover a number of "price" biases under-
lying the estimates weaken the reliability of the comparisons. Because
Soviet list prices for military aid items are much lower than prices
for comparable US equipment, particularly for aircraft and ships, a
simple dollar-for-dollar comparison of US and Soviet military aid tends
to understate the value of the latter. On the other hand, Soviet
technical assistance, which represents about 15 percent of Soviet eco-
nomic aid, is less efficient and relatively more costly than comparable
US assistance, so that an upward and offsetting bias is introduced into
the comparisons. In addition, the major part of foreign aid expendi-
tures consists of machinery and equipment, often in the form of complete
plants, for which appropriate estimates of world prices are not avail-
able. Finally some upward bias may exist on the US side because most
US foreign aid is given with the provision that the recipient must
spend the funds in the United States; it is possible that US prices
for some goods are higher than the world prices on which Soviet aid
expenditures are said to be based.
Taken as a whole, the five categories of national policy
expenditures form a much J_arger part of total GNP in the USSR than in
the United States. In dollar valuations, total nationalpolicy
expenditures in 1955 were 40 percent of total GNP in the USSR and
only 21 percent in the United States; in 1963 their share in Soviet
GNP had dropped to 35 percent, while their share in US GNP had not
changed significantly. Whereas total GNP when valued in dollars was
48 percent of US GNP in 1955, total national policy expenditures in
the USSR were 92 percent of those of the United States. By 1963,
Soviet GNP had risen to 55 percent of the US level in dollars, while
national policy expenditures had risen to a lesser extent, to 95 per-
cent.
D. Comparison of Present and Previous Estimates of US and
Soviet Gross National Product
The comparison of US and Soviet GNP and its end uses presented
in this report differs significantly from previous estimates by this
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Office. The new comparison shows the size of the Soviet economy to be
smaller relative to that of the United States as measured by total
GNP and each major end use except defense. The difference is attributable
to two changes introduced into the new comparisons:. (1) the arbitrary
adjustment of certain ruble/dollar ratios for reasons explained above,
and (2) the omission of expenditures for capital repair and civilian
research and development previously counted in the estimates of Soviet
investment; those items make up about 10 percent of total investment.
Soviet expenditures for capital repair are excluded because in large
part they consist of outlays for current maintenance and repair. On
the other hand, it is believed that sizable amounts of capital repair
are not included in investment reporting in the United States but instead
are written off as current costs. Similarly, expenditures for civilian
research and development are counted as costs and not as investment in
US statistics. The adjustment of the ruble/dollar ratios, however, has
a much greater effect on the US-Soviet comparisons than does the change
in the estimate of Soviet investment.
Table 4 shows the present and previous percentage comparisons
of US and Soviet GNP and its end uses for 1963; the corresponding ruble
and dollar values are shown in Table 14.* The revisions in the com-
parisons affect only the levels and not the trends, because in the
period 1955-63 civilian research and development plus capital repair
did not change as a share of total Soviet investment and because the
adjustment of the ruble/dollar ratios was applied uniformly to all
years for lack of a more defensible alernative. With respect to total
GNP the new?comparison lowers the relative position of the USSR vis-'a-vis
the United States by one-twelfth -- from 48 percent to 44 percent in
1963 by the geometric average comparison. The relative position of
the USSR for consumption as a whole is reduced by only about 1:4 per-
centage points, but for health and education it is significantly
smaller (62 percent compared with 69 percent). As would be expected,
the new comparison substantially changes the relative position of the
USSR with respect to investment. Measured by the geometric average,
the new comparison shows Soviet investment to be 67 percent of that of
the United States, compared with 88 percent according to the previous
comparison by this Office. For administration the comparison is
changed proportionately to the change in the ruble/dollar ratio;
Soviet administration is shown to be 70 percent of that of the United
States instead of 85 percent.
* P. 55, below. The data to calculate a "previous" comparison for
1964 are not available in the necessary detail. It is clear, however,
that the differences between the new and old comparisons would be
about the same in 1964 and are shown in Tables 4 and 14 ior 1963.
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Table 4
Comparison of Present and Previous Estimates of Soviet Gross National Product
as a Percentage of US Gross National Product 21
1963
USSR as a Percent of US
m
1
m
1
a
,
m
1-2I-2
1m
w
H
Gross national product
Consumption
Household consumption
Food
Nonfood goods
Consumer services
Health and education
Investment
Fixed investment
Machinery and
equipment
Construction
Inventories
Previous Comparisons
Present Comparisons
Cl)
1
,
a
,
m
,
m
Ruble
Comparison
Dollar
Comparison
Geometric
Average
Ruble
Comparison
Dollar
Comparison
Geometric
Average
38.1
30.1
29.1
53.7
16.9
15.9
43.4
77.8
72.6
78.5
69.7
100.0
61.6
47.6
38.0
79.9
17.7
29.2
109.6
100.6
95.1
141.7
71.0
115.2
48.4
37.9
33.3
65.5
17.3
21.5
69.0
88.5
83.1
105.5
70.3
107.3
35.8
29.4
28.5
53.7
16.2
15.9
41.8
58.7
60.5
65.4
58.0
100.0
55.3
45.3
37.9
79.9
17.5
29.2
93.0
76.1
79.4
118.1
59.2
115.2
44.5
36.5
32.9
65.5
16.8
21.5
62.3
66.8
69.3
87.9
58.6
107.3
Defense
79.2
82.5
80.8
79.2
82.5
80.8
Administration
85.0
84.2
84.6
70.1
70.1
70.1
a. Calculated from data in Tables 7, 8, 10, 11, and 14, pp. 44, 45, 49, 50, and 55, respectively,
below. Ruble comparisons are 13.sed on 1955 rubles and dollar comparisons on 1963 dollars.
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APPENDIX A
DERIVATION OF BASIC RUBLE/DOLLAR RATIOS
A. Consumption*
The 1955 ruble/1955 dollar ratios for consumption were derived from
a comparison of US and Soviet prices for a sample of 152 items, including
48 food items, 76 nonfood items, 25 services (excluding health and
education), and 3 health and education services. Although the sample is
quite representative of the product mix in both countries with respect
to major product groups, it is less satisfactory within subgroups such
as meat, poultry, clothing, and household appliances; in addition, many
products important in one country are not found at all in the other
country. With respect to health and education services, for which no
suitable measure of output can be calculated, the ruble/dollar ratio
was computed on the basis of the prices of inputs (wages of workers and
the cost of materials purchased). The ruble/dollar ratios calculated
for individual products and services were then grouped into four sub-
components (food, nonfood goods, consumer services, and health and
education), and average ruble/dollar ratios for each subcomponent were
calculated by weighting the individual ratios by the shares of the sub-
components in total GNP in the United States and the USSR, respectively.
The 1955 ruble/1955 dollar ratios for the four subcomponents were con-
verted to 1955 ruble/1963 dollar ratios with the use of appropriate
price indexes available from published and unpublished data of the
Department of Commerce. These indexes are those implicit in data series
given in current and in constant dollars.**
B. Investment
Separate calculations were made of the 1955 ruble/1955 dollar ratios
for three broad categories of investment -- machinery and equipment,
construction, and inventories. The ratios for machinery and equipmentXX
are based on a study comparing 1955 wholesale
prices of more than 500 producer durables in the United States and the
USSR. The ruble/dollar ratios for these individual items were grouped
into several product categories (for example, agricultural machinery,
** For details and sources for these and all other price indexes used
to convert the 1955 ruble/1955 dollar ratios to 1955 ruble/1963 dollar
ratios, see the footnotes to Table 9, p. 47, below.
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trucks and buses, and railroad equipment) and average ratios were
computed for each category, using as weights the value of sales in each
country. The product categories were then grouped into four broad
sectoral categories (agriculture, industry, transportation and communi-
cations, and other), and appropriate US-weighted and Soviet-weighted
ratios were selected for each sector by inspection of the array of
ratios for the product categories. Finally, the sectoral ratios,
weighted by their shares in the total value of the macninery and equip-
ment component of investment in the United States and in the USSR,
were averaged to obtain the overall ratios for machinery and equipment.
These 1955 price ratios were then converted to 1955 ruble/1963 dollar
ratios by dividing them by an appropriate price index published by the
Council of Economic Advisers.
The ratios for construction* are based on a comparison of the cost.
of 25 Soviet construction projects in 1955 ruble prices with the cost
in 1955 dollar prices of 25 comparable construction projects in the
United States. The size and composition of the sample of projects
were limited chiefly by the data available on Soviet construction,
and, as a result, the projects compared are more representative of
construction in the USSR than in the United States. The unweighted
ratios for the 25 pairs of projects show a strong central tendency for
such a dmall sample, however. To obtain the overall ratios for con-
struction, the 25 projects were first grouped into five categories
(housing, industrial construction, highway construction, transportation
and communications facilities -- except highways -- and commercial and
all other construction), and average ratios for each category were
obtained by weighting the individual ratios by their shares in the total
value of construction in that category in the United States and in the
USSR. The ratios for the five categories were then weighted by their
shares in the total value of construction in the two countries to obtain
the 1955 ratios for construction as a whole. These ratios were then
converted to 1955 ruble/1963 dollar ratios by dividing them by the
price index for construction implicit in data published by the
Department of Commerce.
The 1955 ratios for inventories, which include both manufacturing
and retail trade, were derived generally as follows: (1) separate
calculations were made for manufacturing and for retail trade; (2) to
the extent possible with available information, the total value of
inventories in each of these categories was distributed among some
six to eight product groups (for example, food products, chemicals,
and building materials), and a ruble/dollar ratio available from the
detailed calculation of the ratios for consumption and investment
was assigned to each group; (3) to obtain the average ratios for
manufacturing inventories, the product group ratios were aggregated
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in two stages, using as weights, insofar as possible, the additions to
inventories in 1955 in that group in each country; a similar procedure
was used to obtain the average ratios for retail trade; (4) the ratios
for inventories as a whole are the averages of the ratios for manu-
facturing and retail trade, weighted by their respective shares in the
total inventory addition in 1955 in each country. Appropriate price
indexes published by the Council of Economic Advisers were used to
convert the 1955 ratios to 1955 ruble/1963 dollar ratios.
C. Defense
The procedure used to obtain the ruble/dollar ratios for defense
differs from that used to obtain the ratios for the other end uses of
GNP. The ratios for defense were derived as a byproduct of the
methods used to estimate Soviet defense expenditures in rubles and in
dollars. In contrast to the method used for the other end uses, total
defense expenditures in the USSR were calculated directly in rubles
and in dollars for each year. In deriving ruble values for Soviet
defense expenditures, known or estimated ruble prices were applied to
the physical estimates summarizing available information on the com-
ponents of the total military structure. For example, a significant
amount of information is available on the Soviet military pay system,
which was applied to estimates of the Soviet order of battle to obtain
estimates of personnel costs. Similar calculations were made for
military procurement, facilities, and other major expenditure cate-
gories. For most military equipment, however, Soviet prices are not
known, and the prices for these items had to be estimated in dollar
cost and then converted to rubles by estimated ruble/dollar ratios
for individual items. The dollar valuation of Soviet military pro-
grams was made by applying estimated dollar costs to the Soviet
programs at the same level of detail and in the same manner as for
the ruble valuations. In estimating the dollar cost, the guiding
objective was to determine what it would cost to reproduce a given
Soviet program in the United States -- for example, the cost of
producing a Soviet T-54 tank in the United States was estimated, and
not the dollar price of a comparable US tanx. Some fifty major
expenditure categories were considered in compiling the ruble and
dollar valuations of Soviet military programs, and about a dozen
widely varying ruble/dollar ratios are implicit in these calculations.
The results of these calculations were a series of estimates of
Soviet defense expenditures for each year in 1955 rubles and in 1963
dollars. The resulting aggregate ruble/dollar ratio for defense
increases from year to year because of the changing mix of defense
activities. The Soviet mix has been shifting steadily from rela-
tively cheap (in rubles) manpower to relatively expensive advanced
weapons.
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To calculate US expenditures a similar effort was undertaken but
in much less detail because of the absence of the required data. US
defense expenditures in 1963 dollars were divided into 10 major cate-
gories, and these categories were converted to rubles by appropriate
ruble/dollar ratios obtained in the calculation of Soviet defense out-
lays described above. Thus the conversion of US expenditures each
year to rubles reflects the US mix of major categories of defense but
not the detailed US mix within each category. On this account the
ruble value of US defense may be somewhat understated.
D. Administration
The ruble/dollar ratio for administration was derived as the ratio
of average annual earnings of persons employed in government administra-
tion in the two countries. In the USSR the average earnings are those
of all Soviet employees in the organs of state and economic adminis-
tration, in the administrative organs of social and cooperative organi-
zations, and in communal economy. In the United States the average
annual earnings are those of federal, state, and local government
civilian employees (excluding education). Inasmuch as the ruble/dollar
ratio for administration is based on this single comparison, the Soviet-
weighted and US-weighted ratios are identical. The 1955 ratio was con-
verted to a 1955 ruble/1963 dollar ratio by dividing by an index of
average annual earnings of government employees published by the
Department of Commerce.
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APPENDIX B
STATISTICAL TABLES
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Table 5
US: Derivation of Gross National Product, by End Use, in Current Dollars
1955-64
I. Consumption
1. Personal consumption expenditures a/*
2. Federal purchases of goods and
services for education b/
3. Federal purchases of goods and
services for veterans' education,
training, and other benefits b/
I. State and local purchases of goods and
services for education b/
5. Total public education (1-he sum of
items 2, 3, and 4)
6. Less new public construction for
education c/
7. Less estimated equipment purchases
for education d/
8. Public education expenditures -- non-
investment (item 5 minus the sum of
items 6 and 7)
9. Federal purchases of goods and
services for public health and
sanitation 11/
10. Federal purchases of goods and
services for veterans' hospitals and
medical care 12/
11. State and local purchases of goods and
services for public health and sani-
tation 111/
12. Total public health and sanitation
(the sum of items 9, 10, and 11)
13. Less new public construction for
hospitals and institutions c/
14. Less new public construction of sewer
and water systems c/
15. Less estimated equipment purchases for
health and hospitals e/
16. Less estimated equipment purchases for
sewers and sanitation e/
17. Public health and sanitation expendi-
tures -- noninvestment (item 12 minus
the sum of items 13 through 16)
18. Total consumption (the sum of items 1,
8, and 17)
* Footnotes follow on p. 41.
Million US $
1955 1956 1957 1958 1959 1960 1961 1962 1963 1964
256,940 269,917 285,164 293,495 313,835 328,232 337,347 356,347 374,959
117 115 108 151 247 269 265 339 354
13 8 9 11 5 7 9 7 8
11,317 12,340 13,386 15,097 16,285 17,661 19,515 20,551 22,186
11,447 12,463 13,503 15,259 16,537 17,937 19,789 20,897 22,548
2,442 2,556 2,825 2,875 2,646 2,818 3,052 2,984 3,043
4o4 481 388 4o8 457 48o 527 576 (60o)
8,601 9,426 10,290 11,976 13,434 14,639 16,210 17,337 18,905
127 206 220 250 337 317 370 555 551
76o 791 813 887 933 986 1,051 1,092 1,169
3,683 4,076 4,6o5 4,932 5,291 5,578 5,877 6,234 6,743
4,570 5,073 5,638 6,069 6,561 6,881 7,298 7,881 8,463
322 300 354 390 427 400 369 397 454
1,085 1,275 1,344 1,387 1,462 1,487 1,581 1,754 1,966
(32) (30) (35) (39) (43) 40 52 58 (67)
(22) (26) (27) (28) (29) 29 35 41 (48)
3,109 3,442 3,878 4,225 4,600 4,925 5,261 5,631 5,928
268,650 282,785 299,332 309,399 331,572 347,796 358,818 379,722 399,792 425,500 f/
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Table 5
US: Derivation of Gross National Product, by End Use, in Current Dollars .
1955-64
(Continued)
Million US $
1955 1956 1957 1958 1959 1960 1961 1962 1963 1964
II. Investment
1. Gross private domestic investment g/ 63,843 67,366 66,125 56,641 72,726 71,757 68,766 79,126 82,001
2. New public construction activity 7 11,961 12,712 14,017 15,457 16,107 15,953 17,148 17,758 18,679
3. Less military facilities h/ 1,313 1,360 1,287 1,402 1,441 1,386 1,378 1,269 1,560
4. New public construction other than
military (item 2 minus item 3) 10,648 11,352 12,730 14,055 14,666 14,567 15,770 16,489 17,119
5. Equipment purchased by government for
other than defense 1/ 1,173 1,252 1,293 1,294 1,354 1,543 1,732 1,904 (2,000)
6. Defense stockpiling and defense
production facilities 12/ 658 458 567 535 203 57 142 225 118
7. State and local atomic energy develop-
ment 12/ 65 82 104 124 146 175 207 227 247
8. Federal purchase of goods and services
for foreign economic assistance and
Cr) other transfers b/ 348 376 319 315 250 298 422 438 452
1cn
hd t 9. Military assistance j/ 2,325 2,579 2,435 2,281 1,974 1,765 1,465 1,539 1,632 i
1 10. Net exports of goods and services 1/ 1,094 2,930 4,944 1,249 -759 2,996 4,592 4,000 4,399 bd
C) -k- 11. Total investment (item 1 plus the sum I
1 CDC)
W of items 4 through 10) 80,154 86,395 88,517 76,494 90,560 93,158 93,096 103,948 107,968 117,100 f/ 1
i I W
bd III. Defense I
1 hd
1-3 1
1. Purchases of goods and services for I-3
defense h/ 39,232 40,532 44,612 45,061 46,484 45,965 49,312 53,919 55,560
2. Less defense stockpiling and defense
facilities h/ 658 458 567 535 203 57 142 225 118
3. Less military assistance 1/ 2,325 2,579 2,435 2,281 1,974 1,765 1,465 1,539 1,632
4. Less state and local atomic energy
development 12/ 65 82 104 124 146 175 207 227 247
5. Less government sales b/ 358 331 422 498 479 580 589 879 828
6. Total defense (item 1 minus the sum
of items 2 through 5) 35,826 37,082 41,084 41,623 43,682 43,388 46,909 51,049 52,735 53,400 f/
IV. Administration
1. Government purchases of goods and
services minus government sales a 75,950 79,298 86,958 93,956 97,678 100,196 108,540 117,198 123,387
2. Less purchases of goods and services
for defense b/ 39,232 40,532 44,612 45,061 46,484 45,965 49,312 53,919 55,560
3. Less new public construction other
than military 1./ 10,648 11,352 12,730 14,055 14,666 14,567 15,770 16,489 17,119
4. Less equipment purchased by government
for other than defense 1/ 1,173 1,252 1,293 1,294 1,354 1,543 1,732 1,904 (2,000)
5. Less public education expenditures --
noninvestment m/ 8,601 9,426 10,290 11,976 13,434 14,639 16,210 17,337 18,905
0
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6. Less public health and sanitation
expenditures -- noninvestment 12/
7. Less foreign economic assistance and
other transfers 2/
8. Total administration (item 1 minus the
sum of items 2 through 7)
Total gross national product
Table 5
(Continued)
3,109 3,442 3,878 4,225 4,600 4,925 5,261 5,631 5,928
348 376 319 315 250 298 422 438 452
12,839 12,918 13,836 17,030 16,890 18,259 19,833 21,480 23,423 26,000 f/
397,469 419,180 442,769 444,546 482,704 502,601 518,656 556,199 583,918 622,000 f/
a. Source 1_/, Table 11-4; source 12/, Table 14, and source 22/, Table 14. Estimated data are shown in parentheses.
b. 21/
"
d. Estimate of this Office based primarily on data from source 22/.
e. The estimates of state and local expenditures on equipment for sewers and sanitation and for "health and hospitals" for the years 1960-63 were obtained
from unpublished data from the Bureau of the Census. The data were converted from a fiscal year to a calendar year basis by combining half of the current
fiscal year's figure with half of the figure for the succeeding fiscal year. For 1963, half of the fiscal year figures was combined with half of the
estimated figure for fiscal 1964 based on the year-to-year increase in these figures over the preceding 10 years. The 1955 estimates of equipment purchases
for health and hospitals for the years 1955-59 were derived by taking 10 percent of the figures for hospital and institutional public construction for these
years. Estimates of equipment purchases for sewers and sanitation were obtained by taking 2 percent of the figures for public construction of sewer and
water systems for these years. These percentages are based on the approximate ratios of equipment purchases to construction expenditures for health and
sanitation in 1960-63.
f. The estimates for 1964 were derived in the same way as for previous years, using data in source 21.V. The derivation of consumption and investment is
shown in detail in Table 6. The value for defense equals total federal purchases of goods and services for national defense, plus estimated expenditures
of state and local governments (except for atomic energy development) of $0.1 billion, less expenditures of $0.1 billion and $1.3 billion for stockpiling
and military assistance, less estimated government sales of $0.8 billion. The value for administration equals total government purchases of goods and
services less those allocated to health and education, investment, and defense.
g. 24/
h. 21
i. Estimate of this Office based on data given on a fiscal-year basis in source 2/./. The figures were then converted to a calendar-year basis by com-
bining half of the current fiscal-year figure for equipment expenditures with half of the succeeding fiscal-year figure for the years 1955-62. For 1963,
half of the fiscal-1963 figure was combined with half of an estimated figure for fiscal 1964 based on the yearly increase in these figures over the
preceding 10 years.
j. ??.3./
k. See 11, 4, above.
1. See 11, 5, above.
m. See 1, 8, above.
n. See I, 17, above.
o. See 11, 8, above.
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Table 6
US: Derivation of Major Subcomponents of Consumption and Investment in Current Dollars
1955-64
Cr)
1
tri
1
C)
1
I
tt
1
H
1
-P-
Iv
I
Million US $
cn
1
t.i
I
c)
1
i
t. i
1
H
Consumption
Household consumption 12/
Food
Nonfood goods
Consumer services
Health and education L/
Investment
Fixed investment
Machinery and equipment 1/
Construction L/
Inventories f/
Other investment e
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964 2/
268,650
241,516
67,942
88,497
85,077
27,134
80,154
70,096
24,318
45,778
6,291
3,767
282,785
252,888
71,234
90,171
91,483
29,897
86,395
75,532
28,482
47,050
4,978
5,885
299,322
266,515
74,324
94,737
97,454
32,817
88,517
78,941
29,836
49,105
1,878
7,698
309,399
272,912
76,599
93,038
103,275
36,487
76,494
74,471
24,451
50,020
-1,822
3,845
331,572
291,267
77,679
103,293
110,295
40,305
90,560
82,481
27,347
55,134
6,614
1,465
347,796
304,280
79,500
107,175
117,605
43,516
93,158
84,574
29,174
55,400
3,525
5,059
358,818
311,918
81,262
107,556
123,100
46,900
93,096
84,641
27,730
56,911
1,976
6,479
379,722
329,334
84,597
115,063
129,674
50,388
103,948
91,896
31,038
60,858
6,075
5,977
399,792
345,673
87,097
121,351
137,225
54,119
107,968
96,917
33,105
63,812
4,568
6,483
425,500
367,400
91,600
131,200
144,600
58,100
117,100
104,500
37,400
67,100
3,800
8,800
a- The estimates for 1964 were derived in the same way as for previous years, based on data in source 29/.
b. Personal consumption expenditures as presented in the Department of Commerce Table 11-4 (other than those for health
and education) have been allocated among the following components of household consumption:
Allocation of Categories, by Line,
Household Consumption Component Presented in Table 11-4 30/
Food (excluding tobacco) I (1.) through I (4.)
Nonfood goods I (5.), II (1.), II (3.), II (4.), II (7.), III (1.),
V (1.) through V (7.), VIII (la.), VIII (lb.), VIII (1d.),
IX (1.) through IX (5.), IX (7.)
Consumer services II (2.), II (5.), II (6.), II (8.), III (2.), IV,
V (8.) through V (11.), VI (8.), VII, VII (lc.), VIII (le.),
VIII (1f.), VIII (2.), VIII (3.), IX (6.), IX (8.) through
IX (12.), XI, XII
c. Health and education expenditures include the following categories of personal consumption expenditures from Table
11-4 of the National Income and Product Tables: VI (1.) through VI (7.) (expenditures for medical care) and X (private
education and research) 31/ as well as the noninvestment public expenditures for education and health and sanitation
(lines I (8.) and I (17.) from Table 5).
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Table 6
(Continued)
d. Expenditures on machinery and equipment include gross private domestic investment in producers' durable equipment,
an estimated share of equipment purchases in state and local purchases of goods and services for atomic energy develop-
ment, 32/ and other government purchases of equipment for civilian purposes (line II (5.) from Table 5). State and
local government expenditures on atomic energy development are allocated arbitrarily between equipment and construction
according to the relation of producers' durable equipment and construction in gross private domestic investment.
e. Construction includes total new construction activity, both public and private, less construction of military
facilities, the estimated construction component of state and local expenditures on atomic energy development (see
footnote d, above), and federal government purchases of defense production facilities. 33/
f. The inventories component of investment includes the change in business inventories and the net acquisition by the
federal government of strategic materials. 311/
g. Lines II (8.) through II (10.) from Table 5.
Co
Co I
I tt
tt I I
I C)
0 -P?-? i
I LA) 7:1
7d 1
I i t.J
tri I
i 1-3
H
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Table 7
, US: Gross National Product, by End Use, in 1963 Dollars a/
1955-64
m
i
tt
1
a
1
1
H
1
-Pr
-P,
1
Billion 1963 US $
m
1
tt
(2)
1
w
1
tt
1
1-3
Consumption 12/
Household consumption 12/
Food
Nonfood goods
Consumer services
Health and education
Investment 12/
Fixed investment12/
Machinery and equipment
Construction
Inventories
Qther 2/
Defense
Administration
Total gross national product12/
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
307.4
271.8
75.7
95.9
100.2
35.6
94.9
83.5
28.7
54.8
7.0
4.4
45.1
18.3
465.8
322.6
284.5
78.8
96.1
109.6
38.1
96.4
84.5
31.6
52.8
5.4
6.6
44.3
17.7
481.0
327.0
287.0
79.7
98.2
109.1
40.0
94.6
84.4
31.2
53.1
2.0
8.3
46.9
18.3
486.8
331.2
288.4
79.3
96.0
113.1
42.7
81.0
78.7
24.9
53.8
-1.9
4.2
46.1
21.1
479.4
349.6
304.1
81.4
105.2
117.5
45.5
96.3
88.1
27.3
60.8
6.7
1.5
46.9
20.3
513.1
363.5
315.9
82.6
108.0
125.2
47.6
95.8
87.0
29.1
58.0
3.6
5.1
45.3
21.0
525.6
368.1
318.8
83.4
108.6
126.8
49.3
95.3
86.7
27.7
59.0
2.0
6.6
48.1
21.9
533.3
386.0
334.2
85.9
116.1
132.2
51.8
105.3
93.1
31.1
62.0
6.1
6.1
52.5
22.7
566.5
399.8
345.7
87.1
121.4
137.2
54.1
108.0
96.9
33.1
63.8
4.6
6.5
52.7
23.4
583.9
420.3
363.4
90.7
130.4
142.3
56.9
115.3
102.5
37.1
65.4
3.6
9.2
50.9
25.5
612.0
a. End-use components in 1963 dollars were derived by deflating the components shown in current dollars in
Table 6. The deflators are based on Department of Commerce data, and the deflators for 1955 are explained
in the footnotes to Table 9. Deflators for 1956-62 and 1964 were derived in the same way from the same
Department of Commerce sources.
b. Because of rounding, components may not add to the totals shown.
c. Net foreign investment, military assistance, and defense stockpiling.
?
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Table 8
USSR: Gross National Product, by End Use, in 1955 Rubles 2/
1955-64
Billion 1955 Rubles
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
Consumption
89.8
95.5
101.5
106.6
112.3
117.5
122.0
128.3
131.0
136.6
Household consumption
81.6
86.8
92.3
96.9
102.2
106.7
110.5
116.2
118.2
123.0
Food
54.3
57.3
61.1
63.0
65.5
67.2
69.2
72.5
73.2
76.1
Nonfood goods
21.7
23.5
24.7
26.9
29.1
31.3
32.6
34.3
35.0
36.2
Consumer services
5.6
6.0
6.5
7.0
7.6
8.2
8.7
9.4
10.0
10.7
Health and education
8.2
8.7
9.2
9.7
10.1
10.8
11.5
12.1
12.8
13.6
Wages
5.2
5.3
5.5
5.8
6.0
6.4
6.8
7.3
7.6
8.0
Materials
3.0
3.4
3.7
3.9
4.1
4.4
4.7
4.8
5.2
5.6
Ci)
1
V
e
Investment
22.1
26.3
30.3
35.0
39.1
39.2
42.5
44.5
46.1
51.6
CO
e
W
1
Fixed investment
19.9
23.0
25.9
30.1
34.0
36.7
38.4
40.3
42.4
46.2
C)
1
7zi
1
i1
6.2
7i
tt
Machinery and equipment
7.7
8.5
9.9
10.7
11.4
12.7
14.1
15.3
17.2
W
I
Construction b/
13.7
15.3
17.4
20.2
23.3
25.3
25.7
26.2
27.1
29.0
i
1-3
1-3
Inventories
2.2
3.3
4.4
4.9
5.1
2.5
4.1
4.2
3.7
5.4
Defense
15.6
14.8
14.0
14.3
14.7
15.0
15.1
16.6
16.8
16.7
Administration
2.9
3.0
3.0
3.0
3.0
3.1
3.3
3.4
3.4
3.5
Total gross national product
by end use
130.4
139.6
148.8
158.9
169.1
174.8
182.9
192.8
197.3
208.4
Statistical discrepancy c/
0
1.6
-0.9
2.9
-0.9
1.2
3.8
0.7
-0.5
1.9
Total gross national
product
130.4
141.2
147.9
161.8
168.2
176.0
186.7
193.5
196.8
210.3
a. The methods and sources used to estimate Soviet gross national product (GNP) in 1955 are as presented
Although the calculations shown in this 1958 publication have been revised to incorporate later data, the general nature of
the methods and sources remains the same. The largest revisions are in consumption, and these are presented
For succeeding years the values of the separate components are derived by moving base-year values forward by volume indexes
with 1955 weights. The defense component is calculated separately for each year in 1955 prices. The value of expenditures
for government administration in 1955 is moved forward by an index of employment in state and economic administrative
cooperative and public organizations, and municipal government.
b. Construction includes associated costs such as design activity and administrative overhead costs.
c. The statistical discrepancy is the difference between total gross national product by end use and total gross national
product by industry of origin (see p. 12, above).
organs,
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Table 9
US and USSR: Derivation of 1955 Ruble/1963 Dollar Ratios
Soviet Weights
US Weights
(1) (2) (3) (4) (5) (6) (7) (8) (9)
Basic Basic Adjusted Adjusted Basic Basic Adjusted
1955 Dollar/ US Price 1963 Dollar/ 1963 Dollar/ 1955 Ruble/ 1955 Ruble/ US Price 1955 Ruble/ 1955 Ruble/
1955 Ruble Index, 1963 1955 Ruble 1955 Ruble 1963 Dollar 1955 Dollar Index, 1963, 1963 Dollar 1963 Dollar
Ratios (1955 = 100) 2,./ Ratios 12/ Ratios 2/ Ratios ili Ratios (1955 = 100) 2/ Ratios f/ Ratios E/
0 \
Components of gross
national product
Consumption
Food
Nonfood goods
Consumer services
Health and education
Wages
Materials
Investment
Machinery and equipment
Construction
Inventories
Defense 3/
Administration
Components of national
policy expenditures
Education
Wages
Materials
Investment
Industrial investment
Machinery and equipment
Construction
Civilian research
and development
Foreign aid Rs/
0.853 5/
0.568 61
3.405 E/
4,862 1/
0.901 hi
2.598 1/
1.399 E./
1.281 /2/
4.050 E/
4.258 2/
0.901 2/
1.428 2/
3.136 /
1.355 h/
N.A.
N.A.
111.5
108.3
117.8
146.4
111.1
118.0
119.6
111.6
142.8
150.0
111.1
128.1
118.0
125.7
N.A.
N.A.
0.951
0.615
4.011
7.118
1.001
3.066
],.673
1.430
5.783
6.387
1.001
1.829
3.700
1.703
2.3261212/
N.A.
0.951
0.609
4.011
5.932
1.001
2.555
1.394
1.430
4.819
5.322
1.001
1.524
3.083
1.419
2.326
N.A.
1.052
1.642
0.249
0.16!)
0.999
0.391
0.717
0.699
0.208
oa8?
0.999
0.656)
0.324
0.705
0.430
N.A.
1.746 h/
1.842 h/
0.539 12/
0.720 1/
0.696 E./
0.730 2/
0.900
0.247 11
0.572 t./
0.700 2/
0.446 y/
0.731 22/
N.A.
N.A.
111.5
108.3
117.8
131.9
118.0
119.6
111.6
142.8
140.4
128.1
118.0
125.7
N.A.
N.A.
1.566
1.701
0.458
0.546
0.590
0.610
0.806
0.173
0.407
0.546
0.378
0.582
0.430212/
N.A.
1.566
1.776
0.458
0.566
0.708
0.732
0.806
0.208
0.435
0.655
0.454
0.698
0.430
N.A.
Cl)
tci
C)
t=1
1-3
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Table 9
(Continued)
a. The price indexes measuring the change in prices in the United States between 1955 and 1963 are based on the following sources:
1. Food -- implicit price deflator for foods and beverages, 1963/1955. 12/
2. Nonfood -- average of implicit price deflators, 1963/1955, for consumer expenditures on nondurables excluding foods and beveragek and on durable
goods, using 1955 expenditures as weights. 1?2
3. Consumer services -- implicit price deflator for all services, 1983/1955. 12/
4. Health and education wages -- average of indexes of average annual earnings in health and education, 1963/1955. The index of earnings in health
was estimated to be 1.395 based on the change in average earnings in medical and other health services. The index of earnings in education was esti-
mated to be 1.50 based on the change in average annual earnings in public education and educational services, not elsewhere classified. 42/ These two
indexes were then combined using Soviet expenditures on wages in health and education in 1955 as weights. These weights are discussed in footnote 1,
below.
5. Health and education materials purchases -- the implicit price deflator for nondurable goods, 1963/1955.
6. Machinery and equipment -- the implicit price deflator for producers' durable equipment, 1963/1955./
7. Construction -- the implicit price deflator for new construction activity, 1983/1955. 1E/
8. Inventories -- the unweighted average of implicit price deflators for durable goods, nondurable goods, and producers' durable equipment. 121/
9. Administration -- the change in average annual earnings of full-time civilian employees of the federal government and of nonschool employees
of state and local governments, 1963/1955. yi/
10. Wages in education -- see 4, above.
11. Materials purchases for education -- see 5, above.
12. Investment in education -- the implicit price deflator for new public investment activity -- nonresidential buildings, 1963/1955.122/
13. Industrial investment - machinery and equipment -- see 6, above.
14. Industrial investment - construction -- the implicit price deflator, 1963/1955, is derived by weighting the implicit price deflators, 1963/1955,
for private nonresidential, nonfarm construction (128.4), private public utilities construction (125.1), and petroleum and natural gas drilling (118.3)
by the value of expenditures for these categories of construction in 1955.)2611/
hd
b. Column 1 inflated by the respective price index in column 2, except where otherwise indicated. tn
4r
c. Soviet-weighted dollar/ruble ratios (or US-weighted ruble/dollar ratios) for (1) health and education wages, (2) machinery and equipment, (3) con-
struction, (4) administration, (5) education wages, (6) education investment, and (7) industrial investment in machinery and equipment and in construc-
C)
tion were divided (multiplied) by a factor of 1.20, for reasons discussed above(pp. 14-18).Tbe dollar/ruble (ruble/dollar) ratio for nonfood goods was
bl adjusted to reflect the division (multiplication) by 1.20 of the dollar/ruble (ruble/dollar) ratios for radio and television equipment, electrical and
1-3 other appliances, and automobiles. 42/
d. The reciprocal of values in column 4.
e. The price indexes in column 7 are the same as those in column 2 with the exception of those for health and education and for the wages and
materials components of education (as a component of national policy expenditures). For the derivation of the indexes that are the same, see footnote
a, above. The price index for health and education is an average of the price indexes, 1963/55, for wages in health (1.395), wages in education (1.50),
and materials purchases in education (1.111). The derivation of these indexes is explained in footnote a, above. The separate indexes are weighted by
US expenditures on these categories in 1955 -- $8.435 billion, $8.292 billion, and $10.407 billion,respectively. For the derivation of these weights,
see footnote j, below. The price index for wages and materials purchases in education is an average of the price indexes for wages in education (1.50)
and materials purchases in education (1.111). The indexes are weighted by US expenditures on these categories in 1955 -- $8.435 billion and $2.763
billion, respectivq1y. For the derivation of the weights, see footnote t, below.
f. Column 6 deflated by the respective price index in column 7, except where otherwise indicated
g. Soviet expenditures in 1955 in dollars on rood products, nonfood products, and consumer services divided by these expenditures in rubles. 1E3/
h. US expenditures in 1955 on food products, nonfood products, and consumer services in rubles divided by these expenditures in dollars. 42/
i.. An average of ratios of average annual earnings in the united States to average annual earnings in the USSR in 1955 in higher education (2.642), in
primary and secondary education (4.742), and in health (6.060). 22/ The individual ratios were weighted by the relative size of total wages in each
category. 21/ Wages in education are allocated between primary-secondary education and higher education according to the relation shown in source 21.
j. The 1955 ruble/1955 dollar ratio is an average of the ratios of average annual earnings in the USSR to average annual earnings in the United States
in 1955 in higher education (0.379), primary and secondary education (0.211), and health (0.165) and the US-weighted ruble/dollar ratio for materials
purchases (1.540). 23/ These ratios are weighted by the value of expenditures on these categories in 1955. Total education wages in 1955 ($8.435
billion) were allocated between primary-secondary and higher education as estimated in source 24/. Finally, the value of materials expenditures on
health and education was taken as the difference between total expenditures on health and education and expenditures on wages. Total expenditures are
estimated at $27.134 billion (see Table 6), while expenditures on wages as derived above were $16.727 billion.
k.
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Table 9
US and USSR: Derivation of 1955 Ruble/1963 Dollar Ratios
(Continued)
1. The weighted average of 1955 dollar/1955 ruble ratios for components of investment in machinery and equipment. The individual 1955 dollar/1 July 1955
ruble ratios are presented in source 28./. They were weighted by the ruble expenditures reported for 1955 by the USSR Central Statistical Administra-
tion. 27J The overall ratio of 2.899 was then converted to an average 1955 dollar/1955 ruble ratio by dividing the ratio by.a factor of 1.116, the
average of pre-1 July 1955 prices and 1 July.1955 prices for machinery and equipment. 28/
m. The ratio of US expenditures on machinery and equipment in 1 July 1955 rubles to those expenditures in 1955 dollars is estimated as 0.624. 22/ This
was converted to an average 1955 ruble/1955 dollar ratio by multiplying by a, factor of 1.116 (see footnote 1, above).
n. The average 1955 dollar/1 July 1955 ruble ratio with Soviet weights is 1.441. L/ This ratio was converted to an average 1955 dollar/1955 ruble
ratio by dividing by a factor of 1.030, the average of pre-1 July 1955 prices and 1 July 1955 prices for construction-installation work. 81/
o. The 1 July 1955 ruble/1955 dollar ratio for construction with US weights is estimated to be 0.709. L/ This ratio was converted to an average 1955
ruble/dollar ratio by multiplying by a factor of 1.030 (see footnote n, above).
p. Unpublished estimates of this Office based on ruble/dollar ratios for consumer goods, industrial materials, and machinery and equipmeht, using Soviet
(US) weights.
q. Soviet defense was priced item by item in dollar prices and in ruble prices in some detail (see Tables 8 and 11). US defense was also priced in
rubles by applying ruble/dollar ratios estimated for various categories of expenditures (see Table 10). The resulting ruble/dollar ratios, based on
Soviet and US weights, change from year to year and are shown in Table 12.
r. Average annual earnings of government employees (except in the military and education) in the United States (USSR) in 1955 divided by an estimate of
average annual earnings of a, comparable group of employees in the USSR (United States) were used as the dollar/ruble (ruble/dollar) ratio for administra-
tion. The average annual earnings of federal (civilian) and state and local nonschool employees in 1955 were $3,675. L/ In the USSR, employment in
administration, comparable to that in the United States, is found in two employment categories -- administration and housing-communal economy. To derive
the average annual earnings of these employees it was assumed that the average annual earnings of workers in administration are equal to average annual
earnings in industry (1,031 rubles). 21/ The average annual earnings of workers and employees in the housing-communal economy are estimated to be 667
rubles. L./ The average annual earnings of these two groups were averaged by weighting the first group by total employment in administration in 1955
(1.361 million) and the second group by half of total employment in the housing-communal economy in 1955 (0.700 million). The weighted average is 907
rubles.
s. The weighted average of dollar/ruble ratios in higner and primary-secondary education (see footnote i, above).
t. The unadjusted 1955 ruble/1955 dollar ratio for current expenditures on education is an average of the US-weighted ratios for wages in higher
education (0.379), wages in primary-secondary education (0.211), and materials purchases (1.540) (see footnote j, above). The weights are the expendi-
tures on these categories in 1955 -- 06.200 billion for wages in primary-secondary education, $2.235 billion for wages in higher education, and $2.763
billion for materials purchases. Weights for the first two categories are sourced in footnote j, above; the weight for materials purchases is the '
difference between total current expenditures on education ($11.198 billion) and the sum of the wages components.
u.
v. The Soviet-weighted 1955 dollar/1 July 1955 ruble ratio for construction of trade, communal, and other facilitiel (1.)71) 81/ was divided by a
factor of 1.030 (see footnote n, above).
w. The US-weighted 1 July 1955 ruble/1955 dollar ratio for construction of commercial and all other facilities (0.680), 28./ multiplied by 1.030 to
convert it to an average 1955 ruble/1955 dollar ratio (see footnote n, above).
x. The Soviet-weighted 1955 dollar/1 July 1955 ruble ratio for industrial machinery and equipment is estimated to be 3.5. 2/ This value was divided
by 1.116 to convert it to an average 1955 dollar/1955 ruble ratio (see footnote 1, above).
y. The US-weighted 1 July 1955 ruble/1955 dollar ratio for industrial machinery and equipment (0.400), /2/ multiplied by 1.116 to convert it to an
average 1955 ruble/1955 dollar ratio (see footnote 1, above).
z. The Soviet-weighted 1955 dollar/1 July 1955 ruble ratio for industrial construction is estimated to be 1.396. 21/ This value was divided by 1.030
to convert it to an average 1955 dollar/1955 ruble ratio (see footnote n, above).
aa. The US-weighted 1 July 1955 ruble/1955 dollar ratio for industrial construction (0.710), 71/ multiplied by 1.030 to convert it to an average 1955
ruble/1955 dollar ratio (see footnote n, above).
bb. Estimates of this Office give 1955 ruble/1963 dollar ratios of 0.43 for civilian research and development with both Soviet and US weights.
cc. The value of Soviet fo,eign aid is estimated directly in current dollars without the use of dollar/ruble ratios (see p. 28, above). No attempt was
made to value US foreign aid in rubles.
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Table 10
US: Gross National Product, by End Use, in 1955 Rubles 2/
1955-64
CD
I
tri
1
C)
tzi
1
1-3
1
-'-'
VD
1
Billion 1955 Rubles
U)
1
trni
1
C)
1
7d
1
t=i
1
1-2
Consumption
Household consumption
Food
Nonfood goods
Consumer services
Health and education
Investment
Fixed investment
Machinery and equipment
Construction
Inventories
Other 2/
Defense
Administration
Total gross national product
1955 Ruble/
1963 Dollar , /
Ratios (US Weights) 21 1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1.566
1.776
0.458
0.566
0.708
0.732
0.806
0.730
0.20 8
354.8
334.7
118.5
170.3
45.9
20.1
69.2
60.4
20.3
40.1
5.6
3.2
16.1
3.8
443.9
365.9
344.3
123.4
170.7
50.2
21.6
70.2
61.0
22.4
38.6
4.4
4.8
16.1
3.7
455.9
371.8
349.2
124.8
174.4
50.0
22.6
68.7
61.0
22.1
38.9
1.6
6.1
17.3
3.8
461.6
370.7
346.5
124.2
170.5
51.8
24.2
58.6
57.0
17.6
39.4
-1.5
3.1
17.3
4.4
451.0
393.9
368.1
127.5
186.8
53.8
25.8
70.3
63.8
19.3
44.5
5.4
1.1
17.8
4.2
486.2
405.4
378.5
129.4
191.8
57.3
26.9
69.7
63.1
20.6
42.5
2.9
3.7
17.5
4.4
497.0
409.5
381.6
130.6
192.9
58.1
27.9
69.2
62.8
19.6
43.2
1.6
4.8
18.8
4.6
502.1
430.5
401.2
134.5
206.2
60.5
29.3
76.8
67.4
22.0
45.4
4.9
4.5
20.8
4.7
532.8
445.4
414.8
136.4
215.6
62.8
30.6
78.5
70.1
23.4
46.7
3.7
4.7
21.2
4.9
550.0
471.0
438.8
142.0
231.6
65.2
32.2
83.8
74.2
26.3
47.9
2.9
6.7
20.5
5.3
580.6
a. The ruble values of the US components of gross national product, except for defense, were derived by multiplying the dollar
values in Table 7 by the 1955 ruble/1963 dollar ratios in this table. The ruble value of defense in each year was calculated
by multiplying the dollar values in Table 7 by the US-weighted ruble/dollar ratios in Table 12.
b. From Table 9.
C. Including net foreign investment, military assistance, and defense stockpiling. "Other investment" is converted at the
weighted average of the ratios for the other components of investment.
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Table 11
USSR: Gross National Product, by End Use, in 1963 Dollars a/
1955-64
Billion 1963 US $
1963 Dollar/
1955 Ruble
Ratios (USSR weights) 12/
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
Consumption
121.1
127.7
135.5
142.7
150.2
158.3
165.6
175.6
181.3
190.4
Household consumption
87.3
92.9
99.2
104.4
110.5
115.9
120.6
127.5
131.0
137.3
Food
0.951
51.6
54.5
58.1
59.9
62.3
63.9
65.8
68.9
69.6
724
Nonfood goods
0.609
13.2
14.3
15.0
16.4
17.7
19.1
19.9
20.9
21.3
22.0
Consumer services
4.011
22.5
24.1
26.1
28.1
30.5
32.9
34.9
37.7
40.1
42.9
Health and education
33.8
34.8
36.3
38.3
39.7
42.4
45.0
48.1
50.3
53.1
Wages
5.932
30.8
31.4
32.6
34.4
35.6
38.0
40.3
43.3
45.1
47.5
CD
Materials
1.001
3.0
3.4
3.7
3.9
4.1
4.4
4.7
4.8
5.2
5.6
rio
c
0
Investment
38.0
45.7
52.3
60.5
67.1
68.0
74.1
78.5
82.2
92.0
LrJ
C)
jI
Fixed investment
34.9
41.0
46.0
53.5
59.8
64.4
68.2
72.5
76.9
84.3
7i
1-3
Machinery and equipment
Construction
2.555
1.394
15.8
19.1
19.7
21.3
21.7
24.3
25.3
28.2
27.3
32.5
29.1
35.3
32.4
35.8
36.0
36.5
39.1
37.8
43.9
40.4
E3
Inventories
1.430
3.1
4.7
6.3
7.0
7.3
3.6
5.9
6.0
5.3
7.7
Defense
52.3
47.9
43.7
43.2
43.0
42.5
41.5
44.3
43.5
43.3
Administration
4.819
14.0
14.5
14.5
14.5
14.5
14.9
15.9
16.4
16.4
16.9
Statistical discrepancy
1.430
0
2.3
-1.3
4.1
-1.3
1.7
5.4
1.0
-0.7
2.6
Total gross national product
225.4
238.1
244.7
265.0
273.5
285.4
302.5
315.8
322.7
345.2
a. The dollar values of the Soviet components, except for defense, were derived by multiplying the ruble values shown in Table 8
by the 1963 dollar/1955 ruble ratios in this table. The Soviet defense programs were priced year by year directly in dollar
prices by this Office; the implicit Soviet-weighted ruble/dollar ratio is shown in Table 12.
b. From Table 9. The statistical discrepancy was converted from rubles to dollars by means of the dollar/ruble ratio for inven-
tories.
0 0
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Table 12
US and USSR: 1955 Ruble/1963 Dollar Ratios
for Gross National Product, by End Use
1955-64
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
Gross national product
US weights fi
0.953
0.948
0.948
0.941
0.948
0.946
0.941
0.941
0.942
0.949
USSR weights12/
0.579
0.593
0.604
0.611
0.615
0.617
0.617
0.613
0.610
0.609
Geometric average 2/
0.743
0.750
0.757
0.758
0.764
0.764
0.762
0.759
0.758
0.760
Consumption
US weights 2/
1.154
1.134
1.137
1.119
1.127
1.115
1.112
1.115
1.114
1.121
USSR weights 12/
0.742
0.745
0.749
0.747
0.748
0.742
0.737
0.731
0.723
0.717
Geometric average 2/
0.925
0.921
0.923
0.914
0.918
0.910
0.905
0.903
0.897
0.897
tt
(!)fl
Investment
US weights a/
0.729
0.728
0.726
0.723
0.730
0.728
0.726
0.729
0.727
0.727
USSR weights 12/
0.582
0.575
0.579
0.579
0.583
0.576
0.574
0.567
0.561
0.561
Geometric average
0.651
0.647
0.648
0.647
0.652
0.648
0.646
0.643
0.639
0.639
Defense
US weights 1/
0.358
0.364
0.369
0.375
0.380
0.386
0.391
0.397
0.402
0.403
USSR weights 21/
Geometric average si
0.298
0.327
0.309
0.335
0.320
0.344
0.331
0.352
0.342
0.360
0.353
0.369
0.364
0.377
0.375
0.386
0.386
0.394
0.386
0.394
Administration f/
0.208
0.208
0.2n
0.20
0.208
0.208
0.208
0.208
0.208
0.208
a. The ruble value of US expenditures in Table 10 divided by the dollar value of US ex-
penditures in Table 7.
b. The ruble value of Soviet expenditures in Table 8 divided by the dollar value of US
expenditures in Table 11.
c. The geometric mean of the US-weighted and Soviet-weighted ruble/dollar ratios.
d. The US-weighted and Soviet-weighted ruble/dollar ratios for each year are the result of
comparing US expenditures in dollars with US expenditures priced directly in rubles and
Soviet expenditures priced directly in rubles and dollars.
e. The US-weighted and Soviet-weighted ruble/dollar ratios for administration are the same
(see Table 9).
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Table 13
US and USSR: National Policy Expenditures
1955-63.
Billion Rubles (1955 Prices) and Billion US $.(1963 Prices)
1955
1956
1957
1958
1959
1960
1961
1962
1963
National policy expenditures
Dollars
United States
97.5
101.9
106.1
100.9
102.8
105.4
108.6
115.8
119.3
USSR
89.9
89.1
88.0
90.6
95.6
100.4
101.9
109.9
113.6
Education
Dollars
United States f/
USSR 12/
20.1
20.2
21.0
21.0
21.4
22.1
23.1
22.7
24.3
24.1
25.5
25.9
26.4
28.0
27.3
30.2
28.9
32.2
Rubles
T
tii
1
United States L/
9.7
10.1
10.3
11.0
11.5
12.0
12.5
12.8
13.5
1 a
USSR 1/
5.2
5.6
6.o
6.1
6.7
7.4
8.0
8.8
9.5
Industrial investment
I-3
Dollars
United States f/
23.0
26.2
26.9
20.9
21.0
23.3
22.4
23.5
24.6
USSR IL
15.7
18.4
19.8
22.2
25.9
28.7
28.6
30.7
32.8
Rubles
United States E/
13.2
15.1
15.5
12.0
12.1
13.4
12.9
13.5
14.2
USSR 11/
7.7
8.8
9.2
10.4
12.0
13.3
13.6
14.6
15.5
Civilian research and development
Dollars
United States 1/
3.9
4.9
5.1
5.3
5.6
6.2
6.3
6.6
7.0
USSR .j./
1.2
1.4
1.5
1.8
2.1
2.4
2.8
3.1
3.7
0
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Civilian research and development
(Continued)
Rubles
United States k/ 1.7
USSR 1/ 0.5
Foreign aid
Dollars
United States 2./
USSR
Defense
Dollars
United States 2/
USSR p/
Rubles
United States 2/
USSR L/
5.4
0.5
Table 13
(Continued)
2.1 2.2
0.6 0.6
5.5 5.8
o.4
0.9
2.3 2.4
0.8 0.9
5.5 5.0
0.7 0.5
2.6 2.7
1.0 1.2
5.1 5.4
0.9 1.0
2.9 3.1
1.3 1.6
5.9 6.1
1.6 1.4
45.1 44.3 46.9 46.1 46.9 45.3 48.1 52.5 52.7
52.3 47.9 43.7 43.2 43.0 42.5 41.5 44.3 43.5
16.1 16.1 17.3 17.3 17.8 17.5 18.8 20.8 21.2
15.6 14.8 14.0 14.3 14.7 15.0 15.1 16.6 16.8
a. The sum of noninvestment and investment expenditures for education in the United States in 1963 dollars. Non-
investment expenditures on education in current dollars from Table 6 have been deflated by a combined index of wages
in education (weight - 0.75) and an index of prices for nondurable goods (weight - 0.25). The wage index is based
on the Department of Commerce series of average annual earnings in public education, in educational services not
elsewhere classified, and in commercial and trade schools. The index for nondurable goods is the Department of
Commerce deflator for nondurable goods. Investment expenditures in current dollars are from Table 6. These ex-
penditures have been converted to 1963 dollars by the implicit price deflator for new public construction of non-
residential buildings. For the sources of the deflators used for noninvestment as well as investment expenditures,
see Table 9, footnote L./.
b. Soviet expenditures for education (investment, wages, and materials purchases) in rubles multiplied by the
1963 dollar/1955 ruble ratios derived in Table 9.
c. US expenditures for education (investment and noninvestment) multiplied by the 1955 ruble/1963 dollar ratios
derived in Table 9.
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Table 13
US and USSR: National Policy Expenditures
1955-63
(Continued)
. The values of Soviet expenditures in 1955 on wages and materials purchases in education are estimated
The value for wages in 1955 was moved forward by an index of employment in education, excluding science. 74
T e value of materials purchases in 1958 was moved forward by an index estimated by this Office from Soviet budget
data. Soviet investment in education is also estimated from budget data.
e. US expenditures for industrial investment in current dollars include expenditure on new plant and equipment in
manufacturing, mining, and public utilities and construction activity in petrbleum and natural gas drilling. 75/
The value in current dollars was deflated to 1963 prices by the use of unpublished separatP deflators for invest-
ment in manufacturing, mining, and public utilities supplied by the Department of Commerce.
f. Soviet expenditures for industrial investment (machinery and equipment and construction) in rubles multiplied
by the 1963 dollar/1955 ruble ratios derived in Table 9.
g. US expenditures for industrial investment multiplied by the 1955 ruble/1963 dollar ratios derived in Table 9.
Investment in 1963 dollar prices was assumed to be half equipment and half construction. Although there is no
reliable way of estimating this breakdown, the division used corresponds roughly to that estimated in source
h. Soviet data on investment in industry (excluding investment in pipelines) in estimate prices was divided into
machinery and equipment and construction-installation work (including associated costs), using the relative shares
shown in source 77/. Expenditures on machinery and equipment and on construction-installation work were converted
cf)
to average 1955 prices by multiplying the values in estimate prices by factors of 1.127 and 0.966, respectively.
These adjustments are based on data reported in source 78/.
7z1 i. US civilian research and development expenditures in current prices were estimated by subtracting 90 percent
of federal funds spent on research and development (the approximate magnitude of research and development expendi-
tures for defense) from estimated total expenditures for research and development. 79/ The residual values were
1-3
converted to 1963 prices by a price index for research and development estimated by this Office.
j. Soviet expenditures for civilian research and development in rubles multiplied by the 1963 dollar/1955 ruble
ratio derived in Table 9.
k. US expenditures for civilian research and development in dollars multiplied by the 1955 ruble/1963 dollar ratio
derived in Table 9.
1. Estimates of this Office.
m. US expenditures in current dollars estimated as the sum of gross new grants under assistance programs, new
credits, and other assistance through the net accumulation of foreign currency claims. ?2/
n. The sum of current dollar values of drawings on economic aid to Communist countries and military and economic
aid to non-Communist countries as estimated by this Office.
o. From Table 7.
p. From Table 11.
q. From Table 10.
r. From Table 8.
a
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Table 14
Previous Ruble and Dollar Estimates
of Soviet and US Gross National Product, by End Use
1963
Ruble Comparison Dollar Comparison
co
1
tt
1
1
7d
1
bd
1
1-3
I
\-n
1
Consumption
Household consumption
Food
Nonfood goods
Consumer services
Health and education
Wages
Materials
Investment
Fixed investment
Machinery and equipment
Construction
Inventories
Other
Defense
Administration
Statistical discrepancy
Total gross national product
(1)
US-Weighted 1955 Rub1e/
1963 Dollar Ratios LI./*
(2) (3)
Billion
1955 Rubles
(4)
Soviet-Weighted 1963 Dollar/
1955 Ruble Ratios 2/
(5) (6)
Billion
1963 Dollars
US 12/
USSR 2/
US USSR 2/
1.089'1/
1.174 1/
1.566
1.701
0.45862.8
0.546
0.612 1/
0.603 1/
0.590
0.610
0.806
0.612 11/
0.402
0.173
0.902 1/
)1-35.2
405.7
136.4
206.5
29.5
66.1
58.4
19.5
38.9
3.7
4.0
21.2
4.0
526.5
131.0
118.2
73.2
35.0
10.0
12.8
7.6
5.2
51.4
42.4
15.3
27.1
3.7
5.3
16.8
3.4
-1.9
200.7 1/
1.454 gi
1.110 E/
0.951
0.615
4.011
7.118
1.001
2.115 E/
2.175 g/
3.066
1.673
1.430
2.115 LI/
2.591
5.783
1.430
1.792
399.8
345.7
87.1
121.4
137.2
54.1
108.0
96.9
33.1
63.8
4.6
6.5
52.7
23.4
583.9
190.5
131.2
69.6
21.5
40.1
59.3
54.1
5.2
108.7
92.2
46.9
45.3
5.3
11.2
43.5
19.7
-2.7
359.7
* Footnotes follow on p. 56.
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Table 14
Previous Ruble and Dollar Estimates
of Soviet and US Gross National Product, by End Use
1963
(Continued)
a. From Table 9 unless otherwise indicated.
b. The-product of columns 1 and 5 except for consumption, household consumption, health and education, investment, and fixed
investment, which are the sums of their respective components.
c. From Table 8, except "other investment." Other investment is the sum of capital repairs and civilian research and develop-
ment derived from Soviet data.
d. From Table 7.
e. The product of columns 3 and 4, except for consumption, household consumption, health and education, investment, and fixed
investment, which are the sums of their respective components.
f. Column 2 divided by column 5.
g. Column 6 divided by column 3.
h. The ratio for "other investment" is a weighted average of the ratio for the other components of investment.
i. The 1955 value of Soviet gross national product (GNP) given by the sum of four end-use components (including other invest-
ment) moved forward by means of an index of GNP by sector of origin (see p. 12, above).
'.3
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APPENDIX C
SOURCE REFERENCES
1. Gilbert, Milton, and Kravis, Irving B. An International Comparison
of National Products and the Purchasing Power of Currencies,
Organization for European Economic Cooperation, Paris, [1953
2. Moorsteen, Richard H. "On Measuring Productive Potential and
Relative Efficiency," Quarterly Journal of Economics, Aug 61,
vol LXXV, no 3, p. 451-467
18. Commerce. US Income and Output, Washington, 1958, p. 151. U.
19. Ilia., Survey of Current Business, Washington, Jul 62, p. 14. U.
20. Ibid., Jul 64, p. 16. U.
21. Ibid., US Income and Output, Washington, 1958, p. 172-175. U.
Ibid., Survey of Current Business, Washington, Jul 62, p. 18-19. U.
Ibid., Jul 64, p. 20-21. U.
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22. Ibid., US Income and Output, Washington, 1958, p. 190. U.
Ibid., Survey of Current Business, Washington, Jul 62, p. 24.
Ibid., Jul 64, p. 25. U.
23. Ibid., Summary of Governmental Finances, 1955-63, Washington,
1956-64. U.
24. Ibid., Aug 65, p
25. Ibid., US Income
Ibid., Survey of
Jul 64, p
Survey of
Jul 64, p. 22. U.
Summary of Governmental Finances, 1955-64, Washington,
US Income and Output, Washington, 1958, p. 184. U.
Survey of Current Business) Washington, Jul 62, p. 23.
Jul 64, p. 24. U.
Survey of Current Business, Aug 65, p. 8, 21-23. U.
US Income and Output, Washington, 1958, p. 150. U.
Survey of Current Business, Washington, Jul 62, p. 14. U.
Jul 64, p. 16. U.
Aug 65, p. 8. U.
. 8. U. .
and Output, Washington, 1958,
Current Business, Washington,
. 8. U.
US Income
Ibid.,
26. Ibid.,
Ibid.,
Ibid.,
27. Ibid.,
28. Ibid.,
Ibid.,
Ibid.,
29. Ibid.,
30. Ibid.,
Ibid.,
Ibid.,
Ibid.,
31. Ibid.
32. Ibid
Ibid
Ibid
Ibid
Ibid.

and Output, Washington, 1958,
Current Business, Washington,
p. 119. U.
Jul 62, p. 6.
p. 178. U.
Jul 62, p. 21.
U.
U.
U.
1956-65. U.
U.
US Income
Survey of
Jul 64, p
33. US Income
Survey of
21, 24. U.
Ibid., Jul 64, p.
34. Ibid., US Income
Ibid., Survey of
Ibid., Jul 64, p.
and Output, Washington, 1958, p. 175.
Washington, Jul 62,
Current Business,
. 8, 20-21. U.
and Output, Washington, 1958,
Current Business, Washington,
20-22, 25. U.
and Output, Washington, 1958,
Current Business, Washington,
8, 22. U.
p. 175,
Jul 62,
p. 178.
Jul 62,
U.
p. 18-19. U.
178, 190. U.
p. 18-19,
U.
p. 6, 21. U.
37. Commerce. Income and Output, Washington, 1958, p. 228. U.
Ibid., Survey of Current Business, Washington, Jul 64, p. 34. U.
38. Ibid.
39. Ibid.
40. Ibid., Income and Output, Washington, 1958, p. 213. U.
Ibid., Survey of Current Business, Washington, Jul 64, p. 30. U.
41. Economic Report of the President, Jan 64, p. 214. U.
42. Commerce. Income and Output, Washington, 1958, p. 225. U.
Ibid., Survey of Current Business, Washington, Jul 64, p. 33. U.
43. Economic Report of the President, Jan 64, p. 214. U.
44. Commerce. US Income and Output, Washington, 1958, p. 211, 213. U.
Ibid., Survey of Current Business, Washington, Jul 64, p. 29-30. U.
45. Ibid., US Income and Output, Washington, 1958, p. 228. U.
Ibid., Survey of Current Business, Washington, Jul 64, p. 33. U.
46. Ibid., US Income and Output, Washington, 1958, p. 190, 228. U.
Ibid., Survey of Current Business, Washington, Jul 64, p. 34. U.
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57. USSR, Central Statistical Administration. Kapitalinoye
stroitel'stvo v SSSR (Capital Construction in the USSR), Moscow,
1961, p. 46. U.
58. Ibid., p. 258. U.
61. USSR, Central Statistical Administration (57, above), p. 258. U.
63. Commerce. US Income and Output, Washington, 1958, p. 201, 212. U.
64. Schroeder, Gertrude. "Industrial Wage Differentials in the USSR,"
Soviet Studius Jan TT
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74, US Congress, Joint Economic Committee. Annual Economic Indicators
for the USSR, Feb 64, p. 72. U.
75. Commerce. Survey of Current Business, Washington, Jul 64, p. 25-26. U.
Ibid., Jul 62, p. 24-25. U.
25X1
77. Vrasovsky, V.P., and Tolkachev, A.S. Struktura, kapital'nykh
vlozheniy SSSR i SShA (Structure of Capital Investment in the USSR
and the US), Moscow, 1965, p. 83. U.
78. USSR, Central Statistical Administration. Kapitalinoye
stroitelistvo v SSSR (Capital Construction in the USSR), Moscow,
1961, p. 258, 263. U.
79. Commerce. Statistical Abstract of the United States, 1964, Washington,
1965, p. 541. U.
80. Ibid., 1962, p. 863-865. u.
Ibid., 196 p. 857-859. U.
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