nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2020‒05‒18
seven papers chosen by

  1. Bank financial stability, bank valuation and international oil prices: Evidence from listed Russian public banks By Claudiu Albulescu
  2. Elaboration of proposals for the development of electronic trading platforms in the digital economy of Russia By Levashenko, Antonina (Левашенко, Антонина); Girich, Maria (Гирич, Мария)
  3. Long-Term Evolution of Russia’s Market Integration By Gluschenko, Konstantin
  4. The evolution of Belarusian public sector: From command economy to state capitalism? By Aliaksandr Papko; Piotr Kozarzewski
  5. 30 Years of Economic Transformation in CEE: Key Five Lessons For Belarus By Sierž Naurodski; Aleœ Alachnoviè; Izabela Styczyñska; Krzysztof G³owacki; Jaros³aw Neneman; Pawel Swianiewicz; Andrzej Raczko; Kateryna Karunska
  6. Estonian corporate tax: Lessons for Poland By Dmitri Jegorov; Anna Leszczyłowska; Aleksander Łożykowski
  7. Identifying the Phillips Curve in Georgia By Lasha Arevadze; Tamta Sopromadze; Giorgi Tsutskiridze; Shalva Mkhatrishvili

  1. By: Claudiu Albulescu (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers)
    Abstract: Using data on 17 listed public banks from Russia over the period 2008 to 2016, we analyze whether international oil prices affect the bank stability in an oil-dependent country. We posit that a decrease in international oil prices has a negative long-run macroeconomic impact for an oil-exporting country, which further deteriorates the bank financial stability. More specifically, a decrease in international oil prices leads for an oil-exporting country as Russia to a currency depreciation and to a deterioration of the fiscal stance. In addition, given the positive correlation of oil and stock prices documented by numerous previous studies, a decrease in international oil prices represents a negative signal for the stock markets investors, negatively affecting banks' share prices and thus, their capacity to generate sustainable earnings. In this context, the bank financial stability can be menaced. With a focus on public listed banks and using a Pool Mean Group (PMG) estimator, we show that an increase in international oil prices and in the price to book value ratio has a long-run positive effect on Russian public banks stability, and conversely. While positive oil-price shocks contribute to bank stability in the long run, an opposite effect is recorded for negative shocks. However, no significant impact is documented in the short run. Our findings are robust to different bank stability specifications, different samples and control variables.
    Keywords: bank financial stability,international oil prices,bank valuation,Russian public banks,panel data estimation
    Date: 2020–04–25
  2. By: Levashenko, Antonina (Левашенко, Антонина) (The Russian Presidential Academy of National Economy and Public Administration); Girich, Maria (Гирич, Мария) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: In the framework of this work, aspects of the legal regulation of electronic trading platforms were analyzed, in particular, regulatory standards within the framework of international organizations, including the OECD, WTO, UNCITRAL, WIPO, the Council of Europe, as well as standards in countries with the largest volume of electronic commerce, including the USA, China , India, EU countries (France, Germany), Australia. The result of the work was the formation of proposals for regulating the operation of electronic trading floors in Russia, including registration and reporting, defining the boundaries of responsibility of electronic trading floors, taxation, protecting consumers' rights, protecting personal data, currency control, customs regulation, regulating advertising and spam, protecting intellectual property, antitrust regulation, financial and information support measures, currency regulation, etc.
    Keywords: e-commerce, electronic trading platforms, OECD, consumer protection, personal data protection, taxation, advertising and spam, competition
    Date: 2020–03
  3. By: Gluschenko, Konstantin
    Abstract: This article considers an aggregated market represented by a staples basket and analyzes changes in the degree of spatial integration of this market during 1992 to 2019. In an integrated market, interaction of demand and supply in the national market, and not in a regional market, determines the regional price of a good. Based on this, the strength of dependence of regional prices on regional quantities demanded serves as a measure of the degree of market integration.
    Keywords: market integration price dispersion Russian regions
    JEL: R10 R15 R32
    Date: 2020–05–05
  4. By: Aliaksandr Papko; Piotr Kozarzewski
    Abstract: Belarus was among the few post-communist countries to resign from comprehensive market reforms and attempt to improve the efficiency of the economy through administrative means, leaving market mechanisms only an auxiliary role. Since its inception, the ‘Belarusian economic model’ has undergone several revisions of a de-statisation and de-regulation kind, but still the Belarusian economy remains dominated by the state. This paper analyses the characteristic fea-tures of the Belarusian economic system – especially those related to the public sector – as well as its evolution over time during the period following its independence. The paper concludes that during the post-Soviet period, the Belarusian economy evolved from a quasi-Soviet system based on state property, state planning, support to inefficient enterprises and the massive re-distribution of funds to a more flexible hybrid model where the public sector still remains the core of the economy. The case of Belarus shows that presently there is no appropriate theoreti-cal perspective which, in an unmodified form, could be applied to study this type of economic system. Therefore, a new perspective based on an already existing but updated approach or a multidisciplinary approach that incorporates the duality of the Belarusian economy is require
    Keywords: state-owned enterprises, post-communist transition, state capitalism, institutions, Belarus
    JEL: L53 O17 P21 P31
    Date: 2020
  5. By: Sierž Naurodski; Aleœ Alachnoviè; Izabela Styczyñska; Krzysztof G³owacki; Jaros³aw Neneman; Pawel Swianiewicz; Andrzej Raczko; Kateryna Karunska
    Abstract: Belarusian economy has been stagnating in 2011-2015 after 15 years of a high annual average growth rate. In 2015, after four years of stagnation, the Belarusian economy slid into a recession, its first since 1996, and experienced both cyclical and structural recessions. Since 2015, the Belarusian government and the National Bank of Belarus have been giving economic reforms a good chance thanks to gradual but consistent actions aimed at maintaining macroeconomic stability and economic liberalization. It seems that the economic authorities have sustained more transformation efforts during 2015-2018 than in the previous 24 years since 1991. As the relative welfare level in Belarus is currently 64% compared to the Central and Eastern Europe (CEE) countries average, Belarus needs to build stronger fundaments of sustainable growth by continuing and accelerating the implementation of institutional transformation, primarily by fostering elimination of existing administrative mechanisms of inefficient resource allocation. Based on the experience of the CEE countries’ economic transformation, we highlight five lessons for the purpose of the economic reforms that Belarus still faces today: keeping macroeconomic stability, restructuring and improving the governance of state-owned enterprises, developing the financial market, increasing taxation efficiency, and deepening fiscal decentralization.
    Keywords: economic transformation, post-communist transition, Belarus, Poland
    JEL: P1 P2 P3
    Date: 2020
  6. By: Dmitri Jegorov; Anna Leszczyłowska; Aleksander Łożykowski
    Abstract: Estonia has Europe’s most transparent tax system (while Poland is second-to-last, in 35th place), and is also known for its pioneering approach to taxation of legal persons’ income. Since 2000, payers of Estonian corporate tax don’t pay tax on their profits as long as they don’t realize them. In principle, this approach should make access to capital easier, spark investment by companies and contribute to faster economic growth. Are these and other positive effects really noticeable in Estonia? Have other countries followed in this country’s footsteps? Would deferment of income tax be possible and beneficial for Poland? How would this affect revenue from tax on corporate profits? Would investors come to see Poland as a tax haven? Does the Estonian system limit tax avoidance and evasion, or actually the opposite? Is such a system fair? Are intermediate solutions possible, which would combine the strengths or limit the weaknesses of the classical and Estonian models of profit tax?
    Keywords: corporate income tax, distributed profit tax, dividend tax, cash flow tax, Estonia
    JEL: H25 H32 M48
    Date: 2020–04–09
  7. By: Lasha Arevadze (Macroeconomic Research Division, National Bank of Georgia); Tamta Sopromadze (Macroeconomic Research Division, National Bank of Georgia); Giorgi Tsutskiridze (Macroeconomic Research Division, National Bank of Georgia); Shalva Mkhatrishvili (Macroeconomic Research Division, National Bank of Georgia)
    Abstract: There is an ongoing debate around the flattening of the Phillips Curve throughout the world. One of the most important challenges in looking at the statistical relationship between inflation and cyclical position of the economy is the endogenous nature of monetary policy. If monetary policy is successful in insulating the economy from demand shocks, all we are left with in the data is the effects of supply shocks. This makes the link between inflation and aggregate demand look negative, even if the underlying positively-sloped Phillips Curve relationship is alive and well. That's why it is important to take the endogeneity of monetary policy into account when estimating the Phillips Curve econometrically. In this paper we attempt to do that on the Georgian data using two econometric approaches: GMM and ARDL. Our results indicate that the slope of the Phillips Curve in Georgia is positive but relatively flat (despite the fact that it is still steeper than in the developed world). The resulting high sacrifice ratio makes it all the more important for the National Bank of Georgia to remain vigilant and proactive in anchoring inflation expectations. In addition, we show that half of economic agents' inflation expectations in Georgia are backward-looking (with the other half being forwardlooking). This, despite important improvements during the last decade, implies still significant room for monetary policy to further anchor inflation expectations to its target.
    Keywords: Phillips Curve; Inflation; Monetary policy; GMM; ARDL
    JEL: C13 E3 E52
    Date: 2020–01

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