What does Russian shock therapy mean?

Russian shock therapy is an economic program and policy, which was put forward by American economist Sachs.

According to Bolivia's economic crisis, Sachs put forward a set of economic programs and policies, the main contents of which are economic liberalization, economic privatization, economic stability and tight financial and fiscal policies.

Because the implementation of this economic program and policy has a strong impact, it may have a huge impact on social and economic life in a short time, and even lead to a "shock" state. Therefore, people call this economic program and policy put forward by Saks to stabilize the economy and control inflation "shock therapy" by borrowing medical terms.

The role of shock therapy:

Economic transition needs a stable macro-economic environment, and in countries with economic transition, the macro-economy is out of control to varying degrees. For those countries suffering from hyperinflation, extreme expansion of total social demand and serious economic chaos, the primary task is obviously not economic transformation, but macroeconomic stability.

With the continuous deterioration of macro-economy, it is impossible for these countries to solve problems step by step with traditional methods. Shock therapy can provide effective emergency plans for these countries and make them achieve macroeconomic stability in a short time.

So as to create a good economic environment and favorable external conditions for economic transformation and lay a stable foundation. In this sense, shock therapy is very important for economic transformation and has special functions.