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on Confederation of Independent States |
| By: | Eugene Goryunov; Maria Kazakova; Laurence J. Kotlikoff; Arseny Mamedov; Kristina Nesterova; Vladimir Nazarov; Elena Grishina; Pavel Trunin; Alexey Shpenev |
| Abstract: | Every country faces what economists call an intertemporal (across time) budget constraint, which requires that its government’s future expenditures, including the servicing of its outstanding official debt, be covered by its government’s future receipts when measured in present value. The difference between the present value of a country’s future expenditures and its future receipts is called its fiscal gap. This study estimates Russia’s 2013 fiscal gap at 890 trillion rubles or $28 trillion. This longterm budget shortfall is 8.4 percent of the present value of projected GDP. Consequently, eliminating Russia’s fiscal gap on a smooth basis requires fiscal tightening by 8.4 percent of each future year’s projected GDP. One means of doing this is to immediately and permanently raise all Russian taxes by 29 percent. Another is to immediately and permanently cut all spending, apart from servicing outstanding debt, by 22.4 percent. How can a country with vast energy resources and foreign reserves and other financial assets that exceed its official debt still have very major fiscal problems? The answer is that the Russia’s energy resources are finite, whereas its expenditure needs are not. Moreover, Russia is aging and facing massive obligations from its pension system and other age related expenditures. |
| JEL: | H2 H5 H6 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19608&r=cis |
| By: | Gafarova, Gulmira; Perekhozhuk, Oleksandr; Glauben, Thomas |
| Abstract: | There are a lot of empirical studies which examine the pricing behavior of agricultural good exporters and find pricing-to-market behavior by grain exporters in the destination countries. By investigating mainly the U.S., Canadian and Australian wheat exporters’ pricing behavior, Pick and Carter (1994), Yang and Lee (2001), Lavoie (2005) and others argue that wheat exporters exercise pricing to market behavior, meaning that they price discriminate (set different prices) and achieve different markup of prices over marginal costs in some destination countries due to the exchange rate volatility. One of the recent studies by Pall et al. (2013) considers pricing behavior of the Russian exporters and concludes that Russia can implement the price discrimination in Armenia and Azerbaijan, but it does not exert market power in the world wheat market.The main goal of this study is to examine: how does the effects of exchange rate fluctuations on price markups differ across wheat exporting countries – Kazakhstan, Russia and Ukraine? If KRU countries are able to exercise pricing to market behavior and get market power in international wheat market for the period 1996-2012? Which exporting country is expected to adjust prices to achieve foreign currency price stability in the destination markets? Pricing-to-market model will be used to check the existence of market power. |
| Keywords: | Pricing behaviour, international wheat market, Kazakhstan, Russia, Ukraine, Pricing-to-market model, Demand and Price Analysis, International Relations/Trade, Research Methods/ Statistical Methods, R, Q, O, |
| Date: | 2013–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ugidic:159101&r=cis |
| By: | Avouyi-Dovi, Sanvi; Ano Sujithan, Kuhanathan |
| Abstract: | Emerging economies and especially the BRICS countries have strong economic ties with the euro area. In addition, the financial crisis in the euro area may have effects on other markets or areas, especially those of the main emerging markets. Credit default swap (CDS) spreads are relevant indicators of credit risks. After identifying a set of fundamental determinants for sovereign CDS spreads, including euro area financial factors and computing Markov switching unit root test, we estimate Markov switching models over the period from January 2002 to August 2012, in order to examine the behaviour of sovereign CDS spreads in the BRICS countries. , i) We detect two different regimes for the BRICS, that finding is backed by conventional robustness checks and economic events; ii) most of the explanatory variables are involved in the determining theses regimes. Thus both financial and real factors have an impact on the relations defining each regime, except for Russia which is only impacted by financial ones. Especially, euro area financial indicators are largely involved in the BRICS sovereign CDS spreads’ dynamics. Besides, the robustness check supports the use of euro area variables as determinants of BRICS sovereign CDS spreads. |
| Keywords: | Credit default swap; BRICS; emerging markets; euro area financial markets indicators; Markov switching; |
| JEL: | C13 G12 G15 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/11721&r=cis |
| By: | Ano Sujithan, Kuhanathan; Koliai, Lyes; Avouyi-Dovi, Sanvi |
| Abstract: | Commodity prices, especially oil prices, peaked in the aftermath of the financial crisis of 2007 and they have remained highly volatile. All things being equal, the increase in commodity prices may induce a similar tendency of inflation and hence become a monetary policy issue. However, the impact of the changes of commodity prices on inflation is not clear. In this paper, by using Markov-switching models we show that there is an implicit impact of commodity markets on short-term interest rates for a set of heterogeneous countries (the U.S., the Euro area, Brazil, India, Russia and South Africa) over the period from January 1999 to August 2012. Besides, the VAR models reveal that short-term interest rates respond to commodity volatility shocks whatever the country. Moreover, the linkage between commodity markets and monetary policy instruments is stronger since the recent financial crisis. |
| Keywords: | Markov - switching; Commodity prices; VAR models; Monetary Policy; |
| JEL: | E43 E52 E58 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/11718&r=cis |
| By: | Bekchanov, Maksud; Bhaduri, A.; Ringler, C. |
| Abstract: | Intersectoral and interstate conflicts over the use of limited water and energy resources are aggravating in all arid regions throughout the world, and particularly in the Aral Sea basin of Central Asia. Tremendous expansion of the irrigated areas to produce cotton starting from the 1960s led to a heavy dependence of the economies on irrigated agriculture. Irrigation development reduced environmental flows in the basin and caused a gradual desiccation of the Aral Sea, once the fourth largest lake in the world. The emergence of the five independent Central Asian states in the current territory of the Aral Sea Basin, after the dissolution of the Soviet Union in 1991, added new challenges for sharing basin resources. The resume of construction of Rogun dam, with a height of more than 300 m and active storage of over 10 km3, by Tajikistan in 2008 in the Vakhsh tributary of the Amu Darya River in upstream of Nurek reservoir led to fierce intergovernmental debates. Tajikistan intends to increase its national energy security and to gradually grow export revenues from electricity generation through this project with a maximum electricity generation capacity of 3600 MW. The country argues that the construction of the dam also increases water availability to downstream regions. In contrast, downstream Uzbekistan and Turkmenistan are concerned that inappropriate operation of the reservoirs by the upstream country may substantially harm irrigation benefits that are essential for the livelihoods of the majority of the population in these two countries. Despite many debates and controversial arguments by both parties over the results of the construction of the dam its impact of Rogun Dam on agricultural production and livelihoods in the downstream regions has not been assessed in detail. This study uses an integrated hydro-economic model to address the potential impact of Rogun Dam on downstream water availability and irrigation benefits. |
| Keywords: | Intersectoral and interstate conflicts, Aral Sea basin of Central Asia, Rogun dam, irrigated agriculture, integrated hydro-economic model, potential impact of Rogun Dam on downstream water availability and irrigation benefits, Community/Rural/Urban Development, International Development, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, R, Q, O, |
| Date: | 2013–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ugidic:159075&r=cis |
| By: | Oleksandra Betliy; Veronika Movchan; Mykola Pugachov |
| Abstract: | To date, prices of gas and other energy used by households in Ukraine have been generously subsidized by the Government. However, suppressed energy prices lead to excessive use of gas and an inefficient level of investment into energy savings. In addition, Ukraine’s dependence on imported gas contributes to trade imbalances and growing pressure on the devaluation of the national currency. Thus, the issue of raising gas prices remains critical for the population of Ukraine. In particular, this step was also envisaged in an ambitious reform agenda announced in mid-2010 aimed at restoring stable and high economic growth. However, this policy may have an unprecedented impact on the welfare of population. This paper presents the main findings from the simulation of gas price shocks, provides an overview of social support programs in Ukraine and analyses their efficiency. Based on the analyses, the paper draws two major conclusions. First, increases in gas prices result in welfare losses in all household categories, with a more profound impact on urban households. Second, the current social welfare programs are not very efficient in targeting the poorest households. Reform of the social welfare system is thus required to ensure a safety net for poor households in times of gas price hikes. In order to assist national decisionmakers in solving these issues the paper presents general policy recommendations. |
| Keywords: | gas price shock simulation, welfare programs, social support programs |
| JEL: | I38 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2013-12&r=cis |