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on Confederation of Independent States |
| By: | Anders Aslund |
| Abstract: | A conundrum this paper aims to explain is how Russia, a country that pursues such rigorous and conservative macroeconomic policies can be so tolerant of state and crony capitalism. The key issue is what Putin’s economic model amounts to, which is being presented already in section one. Section two reviews Russia’s recent economic performance, while the three ensuing sections examine three key aspects of the Russian economy, namely the eminent macroeconomic policy, the role of energy, and the impact of the Western sanctions since 2014. The final section attempts to answer the likelihood of serious market reforms. |
| Keywords: | Russia, crony capitalism, corruption, macroeconomic policy, economic growth, gas and oil |
| JEL: | D72 D73 E01 E60 E65 H63 P48 Q43 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:sec:mbanks:0148&r=cis |
| By: | Mikosch, Heiner; Solanko, Laura |
| Abstract: | GDP forecasters face tough choices over which leading indicators to follow and which forecasting models to use. To help resolve these issues, we examine a range of monthly indicators to forecast quarterly GDP growth in a major emerging economy, Russia. Numerous useful indicators are identified and forecast pooling of three model classes (bridge models, MIDAS models and unrestricted mixed-frequency models) are shown to outperform simple benchmark models. We further separately examine forecast accuracy of each of the three model classes. Our results show that differences in performance of model classes are generally small, but for the period covering the Great Recession unrestricted mixed-frequency models and MIDAS models clearly outperform bridge models. Notably, the sets of top-performing indicators differ for our two subsample observation periods (2008Q1–2011Q4 and 2012Q1–2016Q4). The best indicators in the first period are traditional real-sector variables, while those in the second period consist largely of monetary, banking sector and financial market variables. This finding supports the notion that highly volatile periods of recession and subsequent recovery are driven by forces other than those that prevail in more normal times. The results further suggest that the driving forces of the Russian economy have changed since the global financial crisis. |
| JEL: | C53 E27 |
| Date: | 2017–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofitp:2017_019&r=cis |
| By: | A.S. Gogoleva (National Research University Higher School of Economics); E.S. Balabanova (National Research University Higher School of Economics); A.G. Efendiev (National Research University Higher School of Economics); V.V.Komarova (National Research University Higher School of Economics) |
| Abstract: | The paper investigates the questions about social organization of work behavior in the Russian companies. Focus in research was made on desirable and obligatory behavior, work standards and determinants of different types of organizational behavior. Survey of 1423 employees presents all key industries of the Russian business, performing within the main federal districts. The results show that the domination of the mercantile and consumer attitude to work as means of achievement of material welfare is not the socio-cultural phenomenon only, but also the result of social and economic conditions in the work sphere. The examined distinction of interests, demands and standards of behavior for representatives of various professions represents one of the deepest contradictions of the development processes of working sphere in Russian society. The research found out deep deformations in the sphere of working activity of employees in the Russian companies. |
| Keywords: | work behavior, extra-role behavior, EVLN, organizational citizenship behavior, role behavior. |
| JEL: | M12 O18 O32 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:56man2017&r=cis |
| By: | Naomitsu Yashiro; Konstantins Benkovskis; Jaan Masso; Olegs Tkacevs; Priit Vahter |
| Abstract: | This paper investigates the effect of export entry on productivity, employment and wages of Latvian and Estonian firms in the context of global value chain (GVC). Like in many countries, exporting firms in Latvia and Estonia are more productive, larger, pay higher wages and are more capital intensive than non-exporting firms. While this is partly because firms that are originally more productive and have better performances are more likely to enter export, Latvian and Estonian firms also realise more than 23% and 14% higher labour productivity level as the result of export entry. Export entry also increases employment and average wages. Gains in productivity and employment are particularly large when firms enter exports that are related to participation in knowledge-intensive activities found in the upstream of GVC. For instance, Latvian firms that start exporting intermediate goods or non-transport services (which include knowledge intensive services) enjoy significantly higher productivity gains than those starting to export final goods or transport services. These findings underscore the importance of innovation policies that strengthen firms’ capabilities to supply highly differentiated knowledge-intensive goods and services to GVC. |
| Keywords: | estonia, export, global value chain, latvia, productivity |
| JEL: | F12 F14 O19 O57 |
| Date: | 2017–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1448-en&r=cis |
| By: | Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Leon Podkaminer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Following the ‘Maidan revolution’ of February 2014, the National Bank of Ukraine (NBU) abandoned the exchange rate peg to the US dollar and switched to a flexible exchange rate, which was later formalised within the framework of the newly adopted inflation targeting regime. Our analysis suggests that this move has been questionable and, at the very least, premature. First, the presumed success of inflation targeting as a universally applicable ‘magical tool’ to reach low and stable levels of inflation in many countries has in reality been largely due to other factors rather than the inflation targeting concept. Second, the NBU’s announced inflation target (5% in the medium term) appears to be overly ambitious given Ukraine’s development level. Experience from other countries suggests that sticking to this target at all cost will likely require a consistently overly restrictive monetary policy, which will constrain Ukraine’s growth prospects. Last but not least, as capital controls are gradually eased, the exchange rate will likely become vulnerable to speculative attacks once again, given the numerous political and geopolitical uncertainties and the ‘thinness’ of the country’s foreign exchange market. Attempts at macroeconomic stabilisation in response to such exchange rate shocks by using ‘classical’ inflation targeting instruments such as interest rates will have a pro-cyclical impact, given the high degree of dollarisation and the related prevalence of so-called ‘balance sheet effects’. The experience of other countries in similar circumstances – both in Central and Eastern Europe and elsewhere – suggests that a preferable strategy would be to smooth exchange rate fluctuations via interventions rather than monetary policy instruments. For this, a certain minimum level of reserves is needed; the latter will not only provide the necessary policy space for interventions should such a need arise, but should discourage speculations against the currency in the first place. Another major reform effort undertaken recently (October 2017) has been a comprehensive pension reform, which envisaged most notably a gradual increase in the effective retirement age. Our analysis suggests that the current situation in Ukraine’s pension system hardly justifies such a step. The country’s statutory retirement age may be indeed rather low, but it is more than offset by the low life expectancy of Ukrainians, and the share of pensioners in the total population is not particularly high by international standards. Besides, while Ukraine’s Pension Fund may be in deficit, this is not very different from the situation observed in other countries, and there are no theoretical arguments why the Pension Fund must be necessarily balanced. Finally, the sustainability of the pension system is not necessarily a cause of major concern either, taking into account the likely future improvements in the labour market. To the extent that any reform of the pension system is needed at all, it should target above all efforts to curb the shadow economy and/or partial reversion of last year’s cuts in social security contributions. |
| Keywords: | monetary policy, inflation targeting, pension systems |
| JEL: | E52 E58 H55 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:wii:pnotes:pn:19&r=cis |
| By: | Nataliya Karlova (Bank of Russia, Russian Federation); Irina Bogacheva (Bank of Russia, Russian Federation); Elena Puzanova (Bank of Russia, Russian Federation) |
| Abstract: | Inflation inertia hinders the process of slowing down inflation to meet the target level and thus lowers the effectiveness of monetary policy. Widespread methods of assessing the observed inflation inertia using different models can’t clear up important aspects, such as between-industry analysis based on firm-specific characteristics and, consequently, the speed of response to external shocks in different sectors. The paper investigates the pricing behaviour of firms on the basis of a survey of companies’ conducted by the Bank of Russia. According to the results the main drivers of inflation (price) inertia (or delayed and prolonged response of inflation to shocks) in Russia are backwardlooking (or adaptive) expectations of economic agents, inflexible pricing policy, and wage indexation based on past inflation level. It is important for central banks to understand these processes in order to implement and maintain the effective monetary policy. |
| Keywords: | price inertia, price-setting behaviour of companies, inflation expectations, Inflexible pricing policy, survey of companies, Russia |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:bkr:wpaper:note9&r=cis |
| By: | Levoshko, Tamila |
| Abstract: | Die vorliegende Studie untersucht erstmalig für die Ukraine und Polen, welche Verbindung zwischen der ‚pork-barrel‘-Politik und dem regionalen Wirtschaftswachstum besteht. Die empirische Analyse erfolgt auf regionaler Ebene für den Zeitraum 2004-2012 anhand des Fixed-Effects-Schätzers. Die Ergebnisse zeigen, dass zwischen ‚political affiliation‘ (der Zentral- und Regionalregierung) und dem regionalen Wirtschaftswachstum in der Ukraine ein negativer Zusammenhang besteht. Für Polen dagegen wird kein signifikanter Zusammenhang festgestellt. Zudem wird herausgefunden, dass der „pro-russische“ Präsident Viktor Janukovych und der polnische Premierminister Jarosław Kaczyński die Regionen mit Wechselwählern finanziell unterstützen, um die Wiederwahlchancen zu erhöhen. |
| Keywords: | Regional Economic Growth; "Pork-Barrel" Politics; Political Affiliation; "Home-Town"-Bias; Ukraine; Poland; Transition |
| Date: | 2017–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0642&r=cis |
| By: | Mamedli Mariam (Bank of Russia, Russian Federation); Andrey Sinyakov (Bank of Russia, Russian Federation) |
| Abstract: | As our calculations show, borrowers with incomes above the median level, who did not apply for loans earlier, could represent 2/3 of extensive growth in the volume of consumer lending. But in the new environment it is difficult to rely on individuals who did not apply for loans even during the boom period of 2010-2012, in the context of rising oil prices and growing incomes. Banks’ choice of this area will necessitate additional costs that will make credit more expensive and thus less attractive to this group. As regards intensive credit growth, the debt burden of borrowers with incomes below the median level has growth potential. Due to the interestrate sensitivity of this group’s demand for credit, the Bank of Russia’s transition to a neutral key rate may provide some support to credit growth, provided that banks are willing to choose business models with lower profit margins. Macroprudential policy measures can incentivise banks to adapt less risky business models, helping them lower interest rates and thus making loans more attractive to creditworthy borrowers. The identified structural features of loan supply and demand make it possible to draw a number of conclusions for the regulator’s policy: 1. The transmission of monetary policy to consumer lending may prove weaker than commonly assumed. First, the reduction of the key rate by the Bank of Russia may modestly translate to a decline in banks’ interest rates due to the fact that high interest rates reflect the particularity of banks’ business models, which target high-risk borrowers. In order to enhance the trans mission, banks will have to adapt to a different model. Second, the level of loan interest rates per se has only a limited impact on demand for loans of this kind, the structures of which are governed to a significant extent by demand from low-income borrowers who are largely insensitive to interest rate levels. 2. The growth of lending in a context of magnified inflation expectations facilitates the accumulation of vulnerabilities in the consumer lending segment, posing risks to financial stability and requiring macroprudential policy adjustment. Magnified inflation expectations can prompt borrowers who evaluate real interest rates as extremely low to take further risks and accumulate excess debt. When these borrowers possess predominantly low and unstable incomes that are sensitive to macroeconomic shocks, banks find themselves exposed to increased credit risks, which, in certain circumstances, can have systemic consequences. In these situations, macroprudential policy measures are capable of protecting both banks and borrowers from taking excess risks, directing banks towards less risky groups of borrowers and thus increasing their resilience in the new environment. |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:bkr:wpaper:note10&r=cis |
| By: | Israel Marques II |
| Abstract: | How do political connections shape the propensity of firms to make investments in weakly institutionalized settings? Traditionally, absent ways to hold the state accountable, firms should withhold investment for fear of predation. An emerging body of work on the political economy of investment has highlighted the competitive advantages that direct political connections with officials can bring to firms in institutionally weak environments with low accountability. These advantages, particularly privileged protection of property rights, can decrease uncertainty and promote investment even absent traditional accountability mechanisms. This paper applies these insights to a particularly risky form of investment for firms: public-private partnerships (PPP) with the state to develop skill. Skill development investments are riskier than average, since they require firms to reveal trade secrets about their production, engage in long-term interactions, and can be poached by free-riding rival firms. This paper argues that these risks canbe overcome by a strong state partner (i.e. PPP), albeit this creates new risks in weakly institutionalized environments if the lower-level officials responsible for implementing agreements cannot be held accountable for agreements and can shirk. This paper argues that political connections provide the means for states to create credible commitment, as they give firms access to power that can enable them to monitor lower-level officials, call attention to misbehavior, and thus punish deviations from PPP agreements. It outlines the ways in which various types of political connections state ownership, direct officeholding, employing former officials, via formal consultative organs , and acquaintanceship can enable firms to hold lower-level officials accountable and engender credible commitment. These arguments are then tested using data from an original survey of 690 firms in 12 Russian regions. |
| Keywords: | Skill Development, Public-Private Partnerships, Political Connections, Institutional Quality, Credible Commitment, Firms, Russia |
| JEL: | D22 J24 I25 L21 L23 O12 P48 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:56/ps/2017&r=cis |
| By: | Park, Joungho (Korea Institute for International Economic Policy); Kang, Boogyun (Korea Institute for International Economic Policy); Min, Jiyoung (Korea Institute for International Economic Policy); Yun, ChiHyun (Korea Institute for International Economic Policy); Gwun, Kawon (Korea Institute for International Economic Policy); Khon, Yevgeniy (Central Asia Institute for Strategic Studies) |
| Abstract: | Amid global economic uncertainties arising from prolonged oil prices, China’s economic slowdown, and increased protectionist US trade policies, the Central Asian governments are developing and pursuing individual eco-nomic development strategies which reflect their own socio-economic characteristics and key policy goals. Central Asia’s three resource-rich countries, Kazakhstan, Uzbekistan and Turkmenistan, have several common obstacles threatening further economic growth: inadequate transpor-tation and logistics networks due to land-locked locations, high dependency on primary commodity exports, among others. Thus their economic development strategies aim to pro-mote economic diversification for sustainable growth. The purpose of this study is to focus on Ka-zakhstan, Uzbekistan and Turkmenistan, ana-lyzing the new economic development strate-gies of these countries, and to discover oppor-tunities and demand for economic cooperation. |
| Keywords: | Economic Development Strategies; Major Central Asian Countries; Resource-rich countries; Economic Cooperation |
| Date: | 2017–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2017_025&r=cis |
| By: | International Monetary Fund |
| Abstract: | Armenia has made significant strides in enhancing macroeconomic stability over the past two decades. This has recently come under strain. Before a full recovery from the Global Financial Crisis (GFC) could take root, a second wave of external shocks, resulting from the slowdown in Russia and the ensuing sharp currency depreciation, buffeted the economy. Armenian public finances have deteriorated steadily since 2013, triggering the debt brake mechanism in 2016. |
| Keywords: | Armenia;Middle East; |
| Date: | 2017–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:17/330&r=cis |
| By: | Olegs Krasnopjorovs (Bank of Latvia) |
| Abstract: | This paper aims at identifying the school characteristics consistently associated with better performance of pupils on state exams. First, we find that exam scores are positively related to school size (the number of pupils in the respective school) and teacher salaries, but negatively – with teacher age. Meanwhile, quantitative inputs like the number of teachers and computers per pupil are not robust determinants of education performance. Second, we show that pupils in urban and rural schools would perform similarly if characteristics of these schools were the same. The Oaxaca–Ransom decomposition fully explains the urban-rural exam score gap by a greater number of pupils and higher teacher salaries in urban schools as well as by different pupil structure; in turn, pupils' ethnic origin plays in favour of rural schools. Finally, Stochastic Frontier Analysis models show that school size is a robust efficiency determinant, while school location in the Riga region or in another big city is not. The bottom line is that structural reforms involving school mergers and a rise in teacher salaries might bring non-negligible dividends in terms of education quality. |
| Keywords: | education performance, school size, rural schools, Oaxaca–Ransom decomposition, Stochastic Frontier Analysis |
| JEL: | I21 C1 |
| Date: | 2017–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:ltv:wpaper:201703&r=cis |
| By: | Boussena, S.; Ionescu, O.; Locatelli, C. |
| Abstract: | Cet article étudie dans quelle mesure la Russie pourrait retarder une entrée massive du GNL américain en Europe en privilégiant une grande volatilité des cours sur le marché de gros du gaz en Europe. Dans un modèle de jeux d'options, caractérisé par la présence d'un fournisseur historique de gaz et d'un entrant potentiel, nous montrons que l'action visant à jouer sur l'incertitude de l'évolution du prix du gaz naturel peut prolonger d'un cran le retard de l'option d'entrée sur le marché d'un nouveau compétiteur. |
| Keywords: | JEUX D'OPTIONS;PRIX DU GAZ;MARCHES GAZIERS EUROPEENS;STRATEGIE GAZIERE RUSSE |
| JEL: | D81 Q30 Q40 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:2017-01&r=cis |
| By: | Aurelio Volpe (CSIL Centre for Industrial Studies) |
| Abstract: | This is the second edition of CSIL Report on the European market for emergency lighting. The information provided in this report is based on desk and field analysis, with information collected on approximately 30 sector companies through 30 direct interviews. The geographical perimeter of the study covers 30 European Countries including the 28 States of the European Union, plus Norway and Switzerland. The countries were divided into eight clusters according to their geographical proximity and similarity in market characteristics. Nordic countries: Denmark (DK), Finland (FI), Norway (NO), and Sweden (SE); United Kingdom (UK) and Ireland (IE); Netherlands (NL); Germany (DE), Austria (AT) and Switzerland (CH); France (FR) and Belgium (BE); Italy (IT); Spain (ES), Portugal (PT) and Greece (GR); Central-Eastern Europe: Bulgaria (BG), Croatia (HR), Cyprus (CY), Czech Republic (CZ), Estonia (EE), Hungary (HU), Latvia (LV), Lithuania (LT), Malta (MA), Poland (PO), Romania (RO), Slovakia (SK), Slovenia (SI). Estimated data on European production and consumption of emergency lighting are provided by country and by geographical area. Activity trend is given as comparison with 2012 (previous edition of this Report). Financial data are showed in terms of turnover growth rate and EBITDA margin for selected companies. Estimated sales figures and market share for specific countries are given, as well main technological findings. Short profiles of the major European and international companies are also provided. |
| JEL: | L11 L22 L68 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:mst:csilre:eu24&r=cis |
| By: | Boussena, S.; Locatelli, C. |
| Abstract: | Confronted with an increasingly competitive market in the European Union and the credible threat of a new entrant in the form of liquefied natural gas imports from the United States, Gazprom’s traditional export strategy is open to question. The company must decide whether it should launch a price war in order passively to adapt to impending competition and its role as a ‘residual supplier’ to the EU gas market, or whether it should take advantage of the current price uncertainty. This article explores the scope for long-term strategic action by Gazprom other than simply engaging in a price war. It is argued that Gazprom could forge a position as a key player in the EU gas market capable of playing the same role as Saudi Arabia does in the global oil market. |
| Keywords: | GAS;LNG;COMPETITION;EU;RUSSIA;GAZPROM |
| JEL: | Q41 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:gbl:wpaper:2017-09&r=cis |