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on Confederation of Independent States |
| By: | Irina Bogacheva (Bank of Russia, Russian Federation); Alexey Porshakov (Bank of Russia, Russian Federation); Natalia Turdyeva (Bank of Russia, Russian Federation) |
| Abstract: | One of the most popular measures for the economy’s cost competitiveness in foreign trade is the real exchange rate. The common approach to its calculation consists in adjusting the nominal exchange rates for the trade-weighted CPI-based inflation differentials between the domestic economy and its major trade partners. Although such approach is most often used for official statistics, the CPI-based real exchange rate does not accurately capture an economy’s competitiveness in foreign trade. The latter is explained by the fact that the CPI naturally considers price changes for both tradable and non-tradable goods. We aim at constructing a set of alternative indicators of REER that would more extensively account for the structure of the Russian economy and its foreign trade and, hence, provide more reliable estimates of changes in Russian economy's cost competitiveness over time. This is done by taking into an account the structure of the Russian economy combined with the specificities of production processes in industries that are extensively involved in foreign trade, as well as integration of Russian industries into global value chains. Against this background, we also show the importance of distinguishing between the output-based and cost-based real exchange rate concepts when addressing the country’s trade competitiveness issue. |
| Keywords: | Real Effective Exchange Rate, Global Value Chains, Input-Output Tables, Industry Competitiveness |
| JEL: | F3 F41 F63 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:bkr:wpaper:wps59&r=all |
| By: | Katarzyna Salach (University of Warsaw); Michal Brzezinski (University of Warsaw) |
| Abstract: | We use newly collected original panel data on the super-wealthy individuals in Poland (observed over 2002-2018) to study the impact of the rich’s political connections on their wealth level, mobility among the rich and the risk of dropping off the rich list. The multimillionaires are classified as politically connected if we find reliable news stories linking their wealth to political contacts or questionable licenses, or if a person was formerly an informant of communist Security Service or member of the communist party, or when the origins of wealth are connected to the privatization process. We find that political connections are not associated with the wealth level of Polish multimillionaires, but that they are linked to the 20-30% lower probability of upward mobility in the ranking of the rich. Moreover, being a former member of the communist party or secret police informant increases the risk of dropping off the Polish rich list by 79%. Taken together, our results show that, contrary to some other post-socialist countries such as Russia or Ukraine, there is little evidence that the Polish economy suffers from crony capitalism. |
| Keywords: | the super-rich, oligarchs, political connections, crony capitalism, Poland. |
| JEL: | D31 D63 P36 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2020-553&r=all |
| By: | Vladislav Abramov (Bank of Russia, Russian Federation) |
| Abstract: | Russian monetary policy could translate on the countries of Eurasian Economic Union (EAEU) through different channels. However, there is still a lack of evidence of the significance of so called spillover effects of Russian monetary policy. This work investigates the influence of Russian monetary policy shocks, proxied by shocks of MIACR, on the EAEU countries. For that purpose, firstly, monetary policy shocks were identified via FAVAR model for the Russian economy, estimated on the monthly data of more than 50 indicators. Further, separately for each country of the union VAR models with previously extracted MP shocks were estimated and both impulse response functions (IRF) and forecast error variance decomposition (FEVD) were analysed. The main result of the work is that effects of shocks in MIACR on industrial production and inflation are not statistically significant. At the same time, such shocks have statistically significant effect on money supply, nominal exchange rates and money market rates in some union’s countries. However, obtained effects are mostly small and heterogeneous. |
| Keywords: | Transmission effects, monetary policy, Eurasian economic union |
| JEL: | E52 E58 E59 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:bkr:wpaper:wps60&r=all |
| By: | International Monetary Fund |
| Abstract: | This Selected Issues paper provides a systematic assessment of Moldova’s governance and institutional frameworks. It follows guidelines approved by the IMF executive board, which were developed to deliver systematic and even-handed analysis on macroeconomically critical governance and institutional vulnerabilities. This paper also focuses on seven key areas for IMF engagement: corruption, rule of law, regulatory framework, fiscal governance, financial sector oversight, anti-money laundering/combating the financing of terrorism, and central bank governance. The analysis is based on internationally comparable data, diagnosis from IMF technical assistance reports, as well as other expert assessments. Strengthening the judiciary and rule of law and accelerating state-owned enterprises (SOE) reform are clear priorities. The widespread nature of governance vulnerabilities and institutional weaknesses in Moldova, combined with capacity constraints, creates challenges for policy formulation and prioritization. Policy efforts should therefore focus on strengthening rule of law and reforming Moldova’s judiciary system, as well as building capacity and increasing the autonomy of key institutions. Steadfast SOE reform would foster competition, investment, and productivity, while reducing fiscal risks. |
| Keywords: | Financial regulation and supervision;Tax evasion;Expenditure efficiency;Money laundering;Central bank independence;ISCR,CR,global competitiveness index,CFT,AML,competitiveness index,sample range |
| Date: | 2020–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2020/077&r=all |
| By: | Tolulope T. Osinubi (Obafemi Awolowo University, Ile-Ife, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | This study examines the effect of globalization on female economic participation (FEP) in MINT (Mexico, Indonesia, Nigeria & Turkey) and BRICS (Brazil, Russia, India, China & South Africa) countries between 2004 and 2018. Four measures of globalization are employed and sourced from KOF globalization index, 2018, while the female labour force participation rate is a proxy for FEP. The empirical evidence is based on Pooled Mean Group (PMG) estimators. The findings of the PMG estimator from the Panel ARDL method reveal that political and overall globalization in MINT and BRICS countries have a positive impact on FEP, whereas social globalization exerts a negative impact on FEP in the long-run. It is observed that economic globalization has no long-run effect on FEP. Contrarily, all the measures of globalization posit no short-run effect on FEP in the short-run. This supports the argument that globalization has no immediate effect on FEP. Thus, it is recommended that both MINT and BRICS countries should find a way of improving the process of globalization generally to empower women to be involved in economic activities. This study complements the extant literature by focusing on how globalization dynamics influence FEP in the MINT and BRICS countries. |
| Keywords: | Globalization; female; gender; labour force participation; MINT and BRICS countries |
| JEL: | E60 F40 F59 D60 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:20/058&r=all |
| By: | International Monetary Fund |
| Abstract: | This paper presents an Ex-Post Evaluation (EPE) of the 2015 Extended Fund Facility (EFF) arrangement with Ukraine. The four-year EFF—amounting to SDR 12.348 billion (900 percent of quota)—was approved in March 2015, after it had become clear that the conflict in the East had pushed Ukraine’s balance of payments and adjustment needs beyond what could be addressed under the 2014 Stand-By Agreement (SBA). The new ambitious program supported by the 2015 EFF was seen by many as a unique opportunity for Ukraine to fundamentally reform its economy. |
| Keywords: | Balance of payments;Central bank independence;Economic indicators;Fiscal policy;Economic policy;ISCR,CR,SBA,Naftogaz,conditionality,program design,prior action |
| Date: | 2020–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2020/204&r=all |
| By: | International Monetary Fund |
| Abstract: | This paper presents 2019 Article IV Consultation with the Republic of Moldova and its Sixth Reviews Under the Extended Credit Facility and Extended Fund Facility Arrangements. Moldova’s economic growth remained solid in the first three quarters of 2019, with output expanding nearly 5 percent, supported by strong domestic demand. The three-year program has been broadly successful in achieving its objectives. Comprehensive reforms have rehabilitated the banking system and strengthened financial sector governance, entrenching macrofinancial stability. Prudent and well-coordinated policies are needed to safeguard the progress achieved. Decisive governance and institutional reforms are necessary for faster, sustainable, and inclusive growth. Safeguarding central bank independence is a priority. The inflation-targeting (IT) regime remains appropriate, but additional efforts are needed to improve policy credibility, promote exchange rate flexibility, and disincentivize foreign currency intermediation. Widespread governance and institutional vulnerabilities are major impediments to accelerating income convergence. Addressing these could have significant growth dividends through faster capital accumulation, reduced labor and human capital headwinds from emigration, and higher productivity. |
| Keywords: | External sector;Real sector;Banking sector;Fiscal policy;Central banks;ISCR,CR,NBM,percent of GDP,Proj,SOEs,ECF |
| Date: | 2020–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2020/076&r=all |
| By: | Bertrand Rioux; Abdullah AlJarboua; Fatih Karanfil; Axel Pierru; Shahd Alrashed; Colin Ward (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | Structural changes in the global oil sector are disrupting conventional market dynamics and the roles played by competing and cooperating producers. Industry players are adjusting to the shale (or ‘tight’) oil revolution and the possibility of plateauing or peaking global oil demand. In particular, OPEC and Saudi Arabia, its top producer, are reshaping the organization’s role as the primary residual supplier to the world oil market. In recent years, OPEC has invited other major exporters, including Russia, to cooperate under the OPEC+ production agreement in an effort to stabilize prices. |
| Keywords: | Competitive oil market, Equilibrium model, OPEC, Residual supplier, Shale oil |
| Date: | 2020–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:prc:dpaper:ks--2020-dp13&r=all |
| By: | Michal Brzezinski (University of Warsaw); Katarzyna Salach (University of Warsaw) |
| Abstract: | We provide the first attempt to understand how differences in households’ socio-demographic and economic characteristics account for disparities in wealth inequality between five post-socialist countries of Central and Eastern Europe. We use 2013/2014 data from the second wave of the Household Finance and Consumption Survey (HFCS) and the reweighted Oaxaca-Blinder-like decompositions based on recentered influence function (RIF) regressions. Our results show that the differences in homeownership rates account for up to 42% of the difference in wealth inequality measured with the Gini index and for as much as 63-109% in case of the P50/P25 percentile ratio. Differences in homeownership rates are related to alternative designs of housing tax policies but could be also driven by other factors. We correct for the problem of the ‘missing rich’ in household surveys by calibrating the HFCS survey weights to top wealth shares adjusted using wealth data from national rich lists. Empirically, the correction procedure strengthens the importance of homeownership rates in accounting for cross-country wealth inequality differences, which suggests that our results are not sensitive to the significant underestimation of top wealth observations in the HFCS. |
| Keywords: | Wealth inequality, decomposition, recentered influence function (RIF) regressions, survey weight calibration, Household Finance and Consumption Survey (HFCS), post-socialist transition, Central and Eastern Europe (CEE), housing, homeownership, missing rich. |
| JEL: | D31 D63 P36 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2020-551&r=all |
| By: | International Monetary Fund |
| Abstract: | This paper discusses Kyrgyz Republic’s Request for Purchase Under the Rapid Financing Instrument and Disbursement Under the Rapid Credit Facility. The COVID-19 pandemic has been hitting the Kyrgyz economy very hard and created an urgent balance of payments need. All sectors are being impacted with extreme severity as measures are being taken to stop the spread of the virus. Given the unprecedented high level of uncertainty, IMF emergency support under the Rapid Financing Instrument and the Rapid Credit Facility helps provide a backstop and increase buffers and shore up confidence. It also helps to preserve fiscal space for essential COVID- 19-related health expenditure and catalyze donor support. Banks’ capital and liquidity buffers need to be used to absorb credit losses and the liquidity squeeze. Once these buffers are exhausted, the central bank needs to show flexibility on the timing of bringing capital and liquidity above the minimum required, considering the length of the crisis. Expeditious donor support is needed to close the remaining balance of payments gap and ease the adjustment burden. |
| Keywords: | External sector;Balance of payments;Central banks;Monetary policy;External debt;Rapid Financing Instrument (RFI);ISCR,CR,percent of GDP,Proj,finance gap,net lend,alternative scenario |
| Date: | 2020–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2020/090&r=all |