nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2006‒08‒05
three papers chosen by
Anna Y. Borodina
Perm State University

  1. The Utilization-Adjusted Output Gap: Is the Russian Economy Overheating? By Nienke Oomes; Oksana Dynnikova
  2. Ukraine: The Cost of Weak Institutions By Andrew Tiffin
  3. Is Rural Income Diversity Pro-Growth? Is It Pro-Poor? Evidence from Georgia By Bezemer, Dirk; Balcombe, Kelvin; Davis, Junior; Fraser, Iain

  1. By: Nienke Oomes; Oksana Dynnikova
    Abstract: This paper estimates the output gap in Russia using a utilization-adjusted production function approach, which we argue is preferable to traditional output gap methods. The approach amounts to (1) using available surveys to estimate the "natural rates" of capacity and labor utilization above which inflation begins to accelerate; (2) estimating a production function with utilization-adjusted capital and labor inputs; and (3) defining potential output as the level of output obtained when both capital and labor are at their estimated natural rates. The results suggest that the output gap in Russia was negative between 1999 and 2003, but may have recently become positive, thus contributing to inflationary pressures.
    Keywords: Inflation , Russian Federation , Labor mobility , Labor markets ,
    Date: 2006–03–23
  2. By: Andrew Tiffin
    Abstract: Ukraine has the potential to be a very wealthy country. It has a well-educated workforce, some of the best agricultural land in the world, an enviable supply of hydrocarbons and minerals, and a relatively well-developed infrastructure. Despite these advantages, however, Ukraine's per capita income remains low. Using a cross-country stochastic-frontier framework, this paper argues that Ukraine's failure to tap its full potential is mainly a result of its market-unfriendly institutional base. With an inherited Soviet framework that is ill suited to the needs of a market economy, Ukraine has been slow to establish the institutions needed to use its resources efficiently. The paper provides a quantitative guide to the benefits, in terms of potential output, of further structural reform. Looking forward, the study finds that durable growth in Ukraine will depend primarily on the authorities' ability to implement their ambitious reform agenda, and thereby to help secure the basic foundations of a modern market economy.
    Date: 2006–07–12
  3. By: Bezemer, Dirk; Balcombe, Kelvin; Davis, Junior; Fraser, Iain
    Abstract: This paper contributes to the literature on the role of on rural livelihood strategies in rural growth and poverty reduction. It distinguishes between livelihood diversity strategies that contribute to sustainable growth in household incomes, and those that mainly have a 'coping' function. It suggests that typically, the contribution of livelihood diversity to growing household income is through relaxing dependence on credit for access to capital. In this scenario, livelihood diversity would lead to higher technical efficiency in agriculture via investment and thereby to higher household incomes. Survey data from Georgia are introduced and used to test these hypotheses using a Bayesian stochastic frontier approach. The findings are relevant to defining more clearly the scope and aims of policies to stimulate the rural non-farm economy in developing and transition countries.
    Keywords: livelihoods analysis, survey data, incomes, efficiency, Bayesian stochastic frontier approach
    Date: 2005

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