nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2007‒04‒14
four papers chosen by
Anna Y. Borodina
Perm State University

  1. Long-term growth prospects for the Russian economy By Roland Beck; Annette Kamps; Elitza Mileva
  2. Changes in the foreign trade structure of the Russian Far East under the process of transition toward a market economy By Hiraizumi, Hideki
  3. Free Trade between the EU and Russia - Sectoral Effects and Impacts on Northwest Russia By Ville Kaitila
  4. Bank supervision Russian style: Evidence of conflicts between micro- and macroprudential concerns By Claeys, Sophie; Schoors, Koen

  1. By: Roland Beck (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Annette Kamps (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Elitza Mileva
    Abstract: This paper provides an assessment of Russia’s long-term growth prospects. In particular, it addresses the question of the medium- and long-term sustainability of the country’s currently high growth rates. Starting from the notion that Russia’s fast economic expansion in recent years has benefited from a number of singular factors such as the unprecedented rise in oil prices, the paper presents new evidence on Russia’s oil price dependency using a Vector Error Correction Model (VECM) framework. The findings indicate that the positive impact of rising oil prices on Russia’s GDP growth has increased in recent years, but tends to be buffered by an appreciation of the real effective exchange rate which is stimulating imports. Additionally, there is empirical confirmation that growth in the service sector – a symptom usually associated with the Dutch disease phenomenon – is mainly a result of the transition process. Finally, the paper provides an overview of the relevant factors that are likely to affect Russia’s growth performance in the future. JEL Classification: O43, O 47, O51, O11, O14.
    Keywords: Russia, economic growth.
    Date: 2007–03
  2. By: Hiraizumi, Hideki
    Keywords: Centrally planned economy (CPE), Process of transition towards the market economy, The role of foreign trade, International trade, Transition to market economy, Local economy, Russia
    JEL: F1
    Date: 2007–03
  3. By: Ville Kaitila
    Abstract: We analyse the implications of free trade between the EU25 and Russia using GTAP, a computable general equilibrium model. We review the sectoral effects by countries and make a tentative assessment of the impact on the regions in Northwest Russia. Free trade on its own would have a negative terms-of-trade effect in Russia and cause a small decline in welfare. If coupled with an increase in productivity, welfare would increase. This emphasises the importance of reforms in the Russian economy. The quantity of production in Russia in ferrous and non-ferrous metallurgy, machine building and metal working, and wood and paper are the principal declining sectors with free trade. Production in capital goods, fuel industry, and services increases. Thus there are some symptoms of Dutch disease. Due to its production structure the northwest would seem to benefit slightly less than Russia on average in terms of the volume of gross regional product. In this respect there are differences between the regions of northwest Russia.
    Keywords: EU, Russia, free trade, integration
    JEL: F15 F17
    Date: 2007–04–10
  4. By: Claeys, Sophie (Research Department, Central Bank of Sweden); Schoors, Koen (CERISE)
    Abstract: Supervisors sometimes have to manage both the micro- and macro- prudential dimensions of bank stability. These may either conflict or complement each other. We analyze prudential supervision by the Central Bank of Russia (CBR). We find evidence of micro-prudential concerns, measured as the rule-based enforcement of bank standards. Macro-prudential concerns are also documented: Banks in concentrated bank markets, large banks, money center banks and large deposit banks are less likely to face license withdrawal. Further, the CBR is reluctant to withdraw licenses when there are “too many banks to fail”. Finally, macro-prudential concerns induce regulatory forbearance, revealing conflicts with micro-prudential objectives.
    Keywords: Prudential Supervision; Bank Stability; Systemic Stability
    JEL: E50 G20 N20
    Date: 2007–03–01

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