nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2011‒11‒14
two papers chosen by
Koen Schoors
Ghent University

  1. Save or borrow – what determines Russian households’ financial strategies? By Semenova, Maria
  2. The SUSTRUS model: a CGE model on regional level for sustainability policies in Russia By Christophe Heyndrickx; Natalia Tourdyeva; Victoria Alexeeva-Talebi

  1. By: Semenova, Maria (BOFIT)
    Abstract: This paper examines what influences Russian households’ decisions to save and borrow. We use the 2008 data from the 17th round of the Russia Longitudinal Monitoring Survey (RLMS-HSE). Our results show that the determinants of saving and borrowing are not only those suggested by economic theory but also include psychological and sociological considerations: smarter respondents, who are satisfied with their lives and inclined to help other people, are more likely to save. Those who enjoy stable or improving financial conditions and/or are satisfied with them are more likely to save and less likely to borrow. Financial literacy, a factor cited by institutional theory as positive for both saving and borrowing from banks, lost its significance at the onset of the financial crisis. Household income, suggested by economic theory as a basis for choosing a financial strategy, was found to have much less influence on savings and to have a positive influence on borrowing, confirming the rationing theory rather than inter-temporal choice theory. Surprisingly, the fear of job loss does not make people save more, contrary to the precautionary motive.
    Keywords: household; Russia; saving; bank loans
    JEL: D14 D91 G21
    Date: 2011–11–04
  2. By: Christophe Heyndrickx; Natalia Tourdyeva; Victoria Alexeeva-Talebi
    Abstract: The present paper describes the construction and first empirical application of the SUSTRUS model (the name of the model refers to “Sustainable Russiaâ€). This model will be the main result of the same-named EU funded project. The SUSTRUS model belongs to the group of regional CGE models, applied to analyze policies with a strong social, economic and environmental dimension. The SUSTRUS model can be used to assist policy makers in their choice of medium and long-term sustainability policies, for the implementation of the EU strategy for sustainable development in Russia as well as an efficient incorporation of the sustainability goals into the existing Russian policy tools on regional and federal levels. The SUSRUS model is constructed as a regional model on federal level, where regions are linked by interregional trade flows, a federal government level and migration. This paper will relate on the calibration of the database for the model and the addition of innovative elements in the model, necessary to model the link between the environmental, social, economic and international modules. The main data sources for the model are the public databases of Rosstat and the micro-level household data from the Russia Longitudinal Monitoring Survey (RLMS). Calibration of the model database was performed by a flexible cross-entropy minimization sub model and standard applied general equilibrium techniques. The general structure of the model will be discussed, focusing on the innovative features of the model and the link between the environmental and economic modules. The application of the model will be shown by a simulation exercise and a presentation of the main results.
    Date: 2011–09

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