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Article: A random walk around Red Square. (economy of the Soviet Union) (editorial)
- Article from:
- The Economist (US)
- Article date:
- August 24, 1991
CopyrightCOPYRIGHT 1991 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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THERE is nothing like a political shock for sending financial markets rushing around like headless chickens. Economic changes-higher inflation, lower corporate profits-can swiftly be fed into a computer model, and some idea can be gained of what the long-term effect might be. But an attempted coup in the Soviet Union is much harder to turn into comforting numbers. it plays upon the most basic of all truths about currencies and stockmarkets: that an inch ahead is darkness. Prices reflect only past facts plus present beliefs about the future based on those facts. When such beliefs are abruptly called into question-and political changes are usually more abrupt than economic ...