nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2014‒03‒22
three papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Parental Occupational Status And Labour Market Outcomes In Russia By Alexey Bessudnov
  2. BRICs versus Other Emerging Economies: The Case of India By Koumparoulis, Dimitrios Nikolaou
  3. Investment to the Rescue By Vasily Astrov; Rumen Dobrinsky; Vladimir Gligorov; Doris Hanzl-Weiss; Peter Havlik; Mario Holzner; Gabor Hunya; Michael Landesmann; Sebastian Leitner; Olga Pindyuk; Leon Podkaminer; Sandor Richter; Hermine Vidovic

  1. By: Alexey Bessudnov (National Research University Higher School of Economics)
    Abstract: This paper looks at the effect of parental occupational status on their children’s occupational status and earnings in Russia. The analysis based on twelve surveys conducted from 1991 to 2011 (n=21,639) demonstrates a statistically significant effect of parental occupational status on respondents’ occupational status and earnings even after controlling for respondents’ education. Contrary to previous findings (Gerber and Hout 2004), the association between social origins and destinations did not strengthen over time. The size of the effect of parental status in Russia is similar to other European countries. A separate analysis shows that monetary returns on higher education increased in post-Soviet Russia, while returns on higher education in terms of occupational status decreased.
    Keywords: returns on education, social mobility, parental occupational status, ISEI, earnings
    JEL: I24
    Date: 2014
  2. By: Koumparoulis, Dimitrios Nikolaou
    Abstract: In late April 2013, Jim O’Neill retired as chairman of Goldman Sachs (GS). The 56-year-old British economist, among other accomplishments, left his mark on the still unfolding globalization story by coining the acronym BRIC, referring to the four rapidly developing nations—Brazil, Russia, India and China—that seemed ready a decade ago to challenge the economic supremacy of the United States, Japan, and Western Europe. Since O’Neill invented the term in 2001, the BRICs have evolved in very different ways and have developed at very different rates. While China’s economy continues to boom, though off its torrid pace of a few years ago, Russia’s economic growth rate slowed last year to an estimated 3.4 percent, according to its Federal Statistics Service—down from 4.3 percent in 2011 and 4.5 percent the year before. Brazil’s gross domestic product grew just 0.9 percent in 2012, while India’s expanded at a 5 percent rate. As O’Neill bows out, perhaps a bigger story than the BRICs today—one that deserves more attention in the board room—is the large number of countries that are now competing with the BRICs, even outpacing them, often for the same reasons the BRICs have done well. What this means, looking ahead, is that corporate executives, as they review their global plans, have more options than ever before available to them.
    Keywords: BRICs, India, Emerging Markets, Foreign Direct Investment, Elections
    JEL: E66
    Date: 2014
  3. By: Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Rumen Dobrinsky (The Vienna Institute for International Economic Studies, wiiw); Vladimir Gligorov (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Peter Havlik (The Vienna Institute for International Economic Studies, wiiw); Mario Holzner (The Vienna Institute for International Economic Studies, wiiw); Gabor Hunya (The Vienna Institute for International Economic Studies, wiiw); Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw); Sandor Richter (The Vienna Institute for International Economic Studies, wiiw); Hermine Vidovic (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The Vienna Institute for International Economic Studies (wiiw) expects GDP in Central, East and Southeast Europe (CESEE) to pick up speed and grow on average by 2-3% over the forecast period 2014-2016 a major driving force rooted in an upward reversal of public and private investment. The question remains, however, whether investment-led growth in the CESEE countries is merely a statistical base effect of a few replacement investments or an indication of a profound paradigmatic shift. Increasing evidence suggests the latter for a number of reasons. During the ongoing economic crisis, public investment was severely reduced. However, in times of extreme uncertainty, the private sector is hesitant to invest. Hence, the public sector has to take the lead. It seems that the time for action has now come. This holds especially true for the New Member States, where towards the end of the previous year additional efforts were made to raise the absorption rate of the funds allocated within the context of the EU multiannual financial framework for 2007-2013 that was about to come to a close. Over the remaining disbursement period of the biennium 2014-2015 substantially higher amounts of EU-funded investment are to be expected. Given that, in practically all cases, national co-financing is also required, CESEE public capital investment will increase, with private investors likely following in its slipstream. Apart from a number of transport infrastructure projects, a host of thermal power plant projects are in the pipeline, as are several major investments in the construction and expansion of nuclear power plants across the region. Apart from public and semi-public infrastructure investment initiatives that have the potential to spur subsequent private investment, improving growth prospects in the euro area, the CESEE economies’ main trading partner, are likely to encourage export industries in the region to modernise and increase their capital stock. This should help avert a lapse into a deflationary spiral and foster a shift towards better equilibrium with lower unemployment rates over the medium term. However, substantial downward risks include possible effects from the current Russia-Ukraine conflict; in particular the interruption of energy supplies, potential trade embargoes or additional interest rate risk premia. All this could adversely affect investment-led growth in CESEE.
    Keywords: Central and East European new EU Member States, Southeast Europe, financial crisis, Balkans, Russia, Ukraine, Kazakhstan, Turkey, economic forecasts, employment, foreign trade, competitiveness, debt, deleveraging, exchange rates, fiscal consolidation
    JEL: C33 C50 E20 E29 F34 G01 G18 O52 O57 P24 P27 P33 P52
    Date: 2014–03

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