Evaluating Russian Economic Growth without the Revolution of 1917∗

This paper uses modern econometric techniques, such as the lasso and the synthetic control method, to construct the counterfactual GDP per capita series for Russia for 1917–1940. The goal of this paper is twofold: first, to predict how the Russian economy might have developed without the Revolution; second, to evaluate and compare various econometric methods for computing the counterfactual GDP per capita series. The counterfactuals based on the preferred method, the synthetic control, suggest that without the Revolution Russia might have grown at about 1.6% a year in 1917–1940. ∗I am grateful to Ran Abramitzky and Frank Wolak for continuous support and encouragement. I also thank Simeon Djankov, Sergei Guriev, Caroline Hoxby, Andrei Markevich, and Hans-Joachim Voth for valuable comments and discussions. I gratefully acknowledge the financial support from the Stanford Graduate Fellowship Fund as a Koret Fellow and from the Stanford Institute for Economic Policy Research as a B.F. Haley and E.S. Shaw Fellow. All remaining errors are mine. †Department of Economics, Stanford University, 579 Serra Mall, Stanford, CA, 94305. E-mail: [email protected]. Website: http://web.stanford.edu/~ikorolev/