nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2013‒11‒02
fourteen papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Labour Market Analysis using Time Series Models: Russia 1999-2011 By Elena Vakulenko
  2. Russian Federation: Drivers and Challenges of Economic Growth and Development By Alena Petrushkevich
  3. Economic Sanctions and The Sanctions Paradox: A Post-Sample Validation of Daniel Drezner’s Conflict Expectations Model By Hillebrand, Evan; Bervoets, Jeremy
  4. Informality and Mobility: Evidence from Russian Panel Data By Slonimczyk, Fabian; Gimpelson, Vladimir
  5. Russian Federation: 2013 Article IV Consultation By International Monetary Fund. European Dept.
  6. Assessing the Impact of the Maternity Capital Policy in Russia Using a Dynamic Model of Fertility and Employment By Slonimczyk, Fabian; Yurko, Anna
  7. Regional Trade Integration in the CIS Area By IDRISOV, GEORGY; TAGANOV, BORIS
  8. Forming the Ukrainian Foreign Trade Strategy: Institutional Issues By A. Kim
  9. The Problems of Informatization in Ukraine By I. Gruzina
  10. Dimension Evaluation of Educational Facilities Indexes System of Higher Education in Ukraine By I. Kocharian
  11. Evaluation and use of indicators of insurance companies’ investment activities By Kozmenko, Olha; Roienko, Victoria
  12. Money for Nothing? Ukrainian Immigrants in Poland and their Remitting Behaviors By Kaczmarczyk, Pawel
  13. Research Methodology for the Theoretical Model of Outstripping Economic Development in the Modern Political Economy By O. Moskalenko
  14. Composite indicator ECAICI and positioning of Georgia’s innovative capacities in Europe-Central Asia Region By Gogodze, Joseph

  1. By: Elena Vakulenko
    Abstract: We investigate the relationship between the main indicators of the labour market in Russia. We try to construct a model of the Russian labour market and identify key relationships. Our special attention is drawn to the impact of the crisis on the Russian labour market and influence of oil price on labor market indicators. We estimated two types of models. They are systems of simultaneous equations model (SEM) and VECM. We received that real wage in Russia are more flexible than employment. During the crisis period real wage was decreasing. SEM model shows that real wage positively depends on real oil price. While the number of employed and unemployment don’t depend on real oil price.
    Keywords: labour market, time series models, Russia
    JEL: J20 J40
    Date: 2013–09–16
  2. By: Alena Petrushkevich
    Abstract: The challenges for the Russian Federation development have been studied in the article by examining the role of the country in the international merchandise trade, trade in services and FDI flows; the evolution of Russian trade patterns by geographical structure and by industries; the compositionof Russian outward and inward FDI. The drivers for sustainable economic development of the Russian Federation have been revealed as well as the main hindrances that may impede a stable economic growth.
    Keywords: working paper, daadpartnership, finance-and-trade
    Date: 2013–10
  3. By: Hillebrand, Evan; Bervoets, Jeremy
    Abstract: Abstract: Daniel Drezner’s 1999 book The Sanctions Paradox used case studies from the former Soviet Union in the 1990s to test his game-theoretic model—the Conflict Expectations Model--of sanctions behavior. The model purports to help predict whether or not a “sender” will resort to economic sanctions to extract concessions from a “target” and whether the target will concede or resist. The model explained quite well the amount of concessions demanded by Russia in the 1990s and the degree of compliance by the 14 new states. Russia is still using economic leverage to reap economic advantage and political influence over its former constituent republics. In this paper we examine the pressures exerted by Russia in the 2000s and their results, using Drezner’s model to see if the model performed as well as before. We found (1) that Russia continued to make extensive use of economic sanctions to influence political decisions in the NIS in the 2000s, (2) that the sanctions were considerably less effective than they had been in the 1990s, (3) that the Drezner model continued to shed light on the sanctions effort but was less accurate in its predictions than it had been in the 1990s. One tentative conclusion from this analysis is that Russia’s sanctions successes in the 1990s created a strong desire in many of the NIS to reduce Russia’s economic leverage over them by diversifying their trade and energy links. It is possible that a less aggressive Russian strategy in the 1990s – though it might have brought smaller short term gains – could have better served Russian’s long term interests
    Keywords: Russia, Sanctions, Economic, Conflict, Expectations, CIS
    JEL: F51 N4 P2
    Date: 2013–05–02
  4. By: Slonimczyk, Fabian (Higher School of Economics, Moscow); Gimpelson, Vladimir (CLMS, Higher School of Economics, Moscow)
    Abstract: Informality is a defining characteristic of labor markets in developing and transition countries. This paper analyzes patterns of mobility across different forms of formal and informal employment in Russia. Using the RLMS household panel we estimate a dynamic multinomial logit model with individual heterogeneity and correct for the initial conditions problem. Simulations show that structural state dependence is weak and that transition rates from informal to formal employment are not lower than from other origin states. These results lend support to the integrated view of the labor market.
    Keywords: informality, labor mobility, initial conditions problem, state dependence
    JEL: J6
    Date: 2013–10
  5. By: International Monetary Fund. European Dept.
    Abstract: KEY ISSUES Context. Growth has slowed amidst weak investment and external demand, while the output gap appears to be at or near zero and inflation is elevated. Activity is currently weak, but is expected to accelerate somewhat later this year. However, structural factors constrain medium-term prospects. The introduction of a new oil price-based fiscal rule, a more flexible exchange rate, and operational improvements in monetary policy have strengthened the macroeconomic policy framework. Financial sector reform has progressed, though sector indicators are mixed and rapid growth in unsecured retail credit is of some concern. Risks remain tilted to the downside, including on account of possible external (e.g., oil price) and domestic (e.g., investor sentiment) shocks. Near-term macroeconomic policy mix. Calls for policy stimulus are testing Russia’s newly strengthened macroeconomic anchors. But absent a widening output gap, expansionary fiscal and monetary policies would at best provide only a modest and unsustainable increase in GDP, while generating overheating and greater policy uncertainty. So far, the Central Bank of the Russian Federation (CBR) has kept its main policy interest rate on hold. Fiscal policy is appropriately neutral this year but is under threat from off-budget spending plans. To contain inflation and reduce risks, the authorities should keep monetary policy on hold with a tightening bias, resist additional fiscal stimulus, and consider further measures to dampen excessive retail credit growth. Medium-term policy challenges. To reach higher sustainable growth, Russia needs to further strengthen the macroeconomic policy framework and implement supply-side reforms. The authorities should gradually tighten the fiscal rule to rebuild fiscal buffers and save more of the nation’s exhaustible oil income. The CBR should complete its transition to a flexible exchange rate and inflation targeting (IT) by end-2014 as planned, which, combined with fiscal policy changes, would help anchor inflation expectations. To mitigate supply-side growth constraints, Russia should reduce the regulatory burden to facilitate more private sector activity in key sectors, strengthen the financial sector to improve its ability to channel savings into productive investment projects, increase transparency, and enhance the business climate. Further global integration, including completing OECD accession, would support and broaden these efforts.
    Date: 2013–10–21
  6. By: Slonimczyk, Fabian (Higher School of Economics, Moscow); Yurko, Anna (Higher School of Economics, Moscow)
    Abstract: With declining population and fertility rates below replacement levels, Russia is currently facing a demographic crisis. Starting in 2007, the federal government has pursued an ambitious pro-natalist policy. Women who give birth to at least two children are entitled to "maternity capital" assistance ($11,000). In this paper we estimate a structural dynamic programming model of fertility and labor force participation in order to evaluate the effectiveness of the policy. We find that the program increased long-run fertility by about 0.15 children per woman.
    Keywords: fertility, female labor supply, structural estimation, Russia
    JEL: J13 C61
    Date: 2013–10
    Abstract: The article covers main stages of integration processes in the CIS area since its formation. We analyzed the specifics of preferential trade agreements (PTAs) in the CIS. We prepared an exhaustive list of expired and currently effective PTAs in the CIS area, taking into account the initial levels of exemptions and the dynamics of their cancellations. We analyzed qualitatively and quantitatively the economic aspects of PTAs. We discussed further integration agenda of the Russian Federation and a role of PTAs as a tool of international economic integration.
    Keywords: Trade, trade integration, preferential trade agreement, free trade agreement, customs union, regionalism, CIS
    JEL: F13 F15 F51
    Date: 2013–10–25
  8. By: A. Kim (N. E. Zhukovsky National Aerospace University "Kharkiv Aviation Institute")
    Abstract: The trends and relationship between indicators of Ukraine's GDP and foreign trade are studied. The time-series econometric model of the three indicators is composed with the trend method, using a linear function, based on which the forecast of GDP and foreign trade by 2015 is made. The features of export-oriented strategy, implemented in Ukraine, with proposals to reorient and modify foreign policy towards import substitution through the use of institutional incentives are defined. The prospect of further research of a foreign trade strategy is the development and examination of alternative strategies.
    Keywords: foreign trade, foreign trade strategy, export-oriented strategy, import-substitution strategy, property rights, transaction costs, institutional approach
    Date: 2013–10–19
  9. By: I. Gruzina (Kharkiv National University of Economics)
    Abstract: The article describes the main problems associated with the acceleration of informatization process in Ukraine, that changes the requirements for employees, the attitude to business, the systems of enterprise management, the motives and methods of decision-making. The effect of this process on the economic life of Ukrainian society, its ability to lead to qualitative structural changes in the economy were researched. The obstacles, which hinder the informatization development in Ukraine were identified and directions to overcome them were suggested. The theoretical basis of the "informatization" concept was elaborated. The practical approaches to its implementation in the economic system of a country, a region, an enterprise were considered.
    Keywords: : informatization, information society, information infrastructure, information technology
    Date: 2013–10–19
  10. By: I. Kocharian (I. K. Karpenko-Karyi Kyiv National University of Theatre, Cinema and Television)
    Abstract: The analysis of the development and establishment of a monitoring system that would meet the necessary requirements and provide the system of higher education planning with data using contemporary models and information technologies has been performed. The adequacy of monitoring system to the management system has been proved, as the main purpose of monitoring system is to improve the efficiency of management system, being the information support subsystem, by providing timely and qualitative information. The system of educational facilities indexes, its structure, characters of indexes and set of indexes detection by any features and their combinations has been investigated and dimension of indexes system that ensure recipients with required set of indexes of educational facilities of higher education institutions in Ukraine has been evaluated.
    Keywords: monitoring system, higher education planning, educational facilities, dimension evaluation, set of in-dexes
    Date: 2013–10–19
  11. By: Kozmenko, Olha; Roienko, Victoria
    Abstract: The paper offers a scientific and methodical approach to the evaluation of investment activities of insurance companies, develops investment strategies based on the correlation of investment characteristics, studies the current level of Ukrainian companies’ investment activities in the area of life insurance and presents recommendations regarding the choice of the proper investment strategies.
    Keywords: insurance company, investment potential, investment risk, efficiency, investment activity.
    JEL: G20 G22
    Date: 2013–10–03
  12. By: Kaczmarczyk, Pawel (Warsaw University)
    Abstract: Analysis of remittances lies in the very centre of the scientific debate on developmental impacts of migration. On the macro level money sent back home may serve as an important source of capital (as compared to the value of export, Development Assistance or Foreign Direct Investment) but also cause inflationary pressure or disincentives for domestic savings. On the micro level remittances may constitute the major source of income and become a means towards consumption smoothing (migration as survival strategy). Notwithstanding, the very nature of remittances and underlying factors are still under theoretical and empirical discussion. The aim of the article is to assess patterns of remittances sent by Ukrainian migrants staying in Poland, to identify the main motives to remit and thus to understand mechanisms governing this process. The article hypothesizes that remitting depends strongly on the structure of migration (including socio-demographic factors responsible for particular motives to remit) and the type of mobility. Particularly, temporary migrants are expected to remit more likely. Econometric analysis based on an unique survey on migration and remittances completed in 2012 shows that in case of temporary migrants whose life centers are still located in sending communities remittances easily become an important part of contractual intra-family arrangements (with altruistic and exchange motives playing also a role). This outcome is important from the policy perspective because it helps to utilize developmental impacts of longstanding temporary migration strategies.
    Keywords: remittances, reasons to remit, Ukrainian migrants in Poland
    JEL: F22 F24 J61
    Date: 2013–10
  13. By: O. Moskalenko (f Kyiv National Economic University named after Vadym Hetman)
    Abstract: The article deals with research methodology for the theoretical models of outstripping economic development. The essence of outstripping development and its objective need for self-reproductive growth are revealed. The author proves the inevitability of outstripping development and its otentiality and significance for the development of the society and a man. The statistical rule of doubling revenue for Ukraine has been applied analytically, the moment it can reach the middle income of dvanced countries has been determined. The current trends in GDP growth and in terms of its rapid development are used in the forecast. The neoclassical model of economic growth and the theory of Big Waves are analyzed from the point of view of identifying "capabilities", "chance" for the country to enhance a breakthrough in economic development
    Keywords: methodology, outstripping economic development, theoretical model, economic policy, capabilities
    Date: 2013–10–19
  14. By: Gogodze, Joseph
    Abstract: This paper presents a brief analysis of the current innovative capabilities of Georgia based on the Europe-Central Asia Innovative Capability Indicator (ECAICI). This composite indicator is constructed using factor analysis tools. Research reveals that innovative processes in the Europe-Central Asia (ECA) region (by the World Bank classification) are mainly affected by four unobservable factors: knowledge creation, economic sophistication, knowlege absorption-diffusion, and human capital production. We show that the ECAICI is closely related to other well-known innovation indicators and to GDP per capita. The ECAICI was used to analyze the innovative capability dynamics during 1996–2010. This study serves as an illustration for the use of the ECAICI as an instrument for innovative capability assessment and analysis in Georgia and other post-USSR countries
    Keywords: National innovation systems, Developing countries, Countries in transition, Composite indicator, Factor analysis
    JEL: C43 O30 C81
    Date: 2013–01–20

This nep-cis issue is ©2013 by Alexander Harin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.