Soviet industrial production, 1928 to 1955 : real growth and hidden inflation

The mechanism of hidden inflation in sowiet industrial growth statistics between 1928 and 1950 is descibed. Hidden inflation arose when new products were substituted for old ones. Substitution biases in Sowiet and Western growth estimates are compared; the extend of hidden inflation in the sowiet figures is estimated. The view that all Sowiet growth series were exaggerated is qualified; the persumption that the lower a figure, the more reliable it must be is overturned. The Moorsteen paradox, hidden inflation in industry as a whole, but none in machine building where product innovation was most rapid, is explained.