The fall and recovery of the Cuban economy in the 1990s: mirage or reality
2001
E. Hernandez-Cata
The collapse of the Cuban economy following the cessation of Soviet assistance gave way to a strong recovery in 1994-1996.The author proposes three possible explanations for this recovery:that it never took placethat it reflected a surge in productivity resulting from stabilisation and liberalisation in 1993 - 1994that it resulted from a favorable aggregate demand shockThe author stresses that the most persuasive option is that there was a surge in productivity resulting from stabalisation and liberalisation. This suggests that a strong and durable expansion will probably not be achieved on the basis of present policies, but that the benefits of full liberalisation of the economy are likely to be considerable.The article concludes that:there is no definitive answer on whether the abrupt ending of the Cuban economy's post-Soviet collapse and the period of subsequent growth reflected improved policies or statistical fabrication. There are several gaps in the datathere is a degree of consistency within the data which suggests that the data has not been comprehensively cooked-up. The policies of macroeconomic stabalisation and structural liberalisation in 1993/1994 led to the growth of output productivitythe backtracking on several liberalization measures may explain the lacklustre performance of the Cuban economy in 1997-1998 and suggests that on present policies, it is unlikely that living standards can be raised appreciablythe considerable favourable effects of partial liberalisation measures implemented in 1993-1994 indicate that a complete reform program would have a far reaching beneficial impact on the Cuban economy [author]
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