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Market Transition

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Submitted By ktchingching
Words 1387
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Introduction
By 1991 August, in the countries that were members of the former USSR has brought a dramatic change in economic system, The 3 major causes of the system change. Firstly, it’s the political change. Under the communist system, the transportation and communication networks were always in lingering. And also, at some areas, particularly causeway, were discouragingly polluted and the banking system was very narrow. Secondly, it’s the economic theory, the change was for government to consider the ways to set economic purpose and use their strength to direct the economy to try achieving those objectives. The government also followed the trend of selling off business enterprises to private firms in the anticipation that competition and the profit motive will increase their success achieved in the performance. Lastly, it’s the globalization. The increased of international trade and investment have decreased the gap of cultures, technologies and economic decision making. As the globalization carried on, the economies had also become more very much alike.

Body
The intention of this essay is test the benefits and failures of Russia's transition. The change of Russia shifting from planned to market system has brought many benefits. The graph below shows that the Russia’s GDP has increased throughoutly since 2000. Source : www.tradingeconomics.com (world bank)

On the other hand, the productivity was also increasing. It is also a major factor for economic growth. There were evidence to it since middle of 19th century. The economic growth was mushrooming in the 20th century. It was because of the substracted inputs of labor, energy, materials, and land of economic output, and also the broader markets for various outputs. (Dr. Jean-Paul Rodrigue, 1998) The graph below shows the level of productivity has increased.
Source : www.tradingeconomics.com

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