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on Confederation of Independent States |
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Issue of 2022‒05‒23
sixteen papers chosen by |
| By: | Berger, Eva M.; Bialek, Sylwia; Garnadt, Niklas; Grimm, Veronika; Other, Lars; Salzmann, Leonard; Schnitzer, Monika; Truger, Achim; Wieland, Volker |
| Abstract: | The Russian war of aggression against Ukraine since 24 February 2022 has intensified the discussion of Europe's reliance on energy imports from Russia. A ban on Russian imports of oil, natural gas and coal has already been imposed by the United States, while the United Kingdom plans to cease imports of oil and coal from Russia by the end of 2022. The German Federal Government is currently opposing an energy embargo against Russia. However, the Federal Ministry for Economic Affairs and Climate Action is working on a strategy to reduce energy imports from Russia. In this paper, the authors give an overview of the German and European reliance on energy imports from Russia with a focus on gas imports and discuss price effects, alternative suppliers of natural gas, and the potential for saving and replacing natural gas. They also provide an overview of estimates of the consequences on the economic outlook if the conflict intensifies. |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:imfswp:166&r= |
| By: | International Monetary Fund |
| Abstract: | Activity returned to its pre-COVID level in 2021. Inflation remains well above the NBK’s 4–6 percent target band, and spillovers from sanctions on Russia will exacerbate price pressures and weaken economic growth in 2022. Kazakhstan benefits from strong fiscal and external buffers but risks to the outlook are elevated due to the uncertain impact on Kazakhstan of the sanctions on Russia and heightened domestic tensions since the January social unrest episode. In the medium term, non-oil growth under the baseline is expected to converge to about 4 percent. Sustainable growth will require greater economic diversification. Climate-related challenges are acute for Kazakhstan given its outsized hydrocarbon sector, high per-capita greenhouse gas emissions, and low domestic energy prices. |
| Date: | 2022–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/113&r= |
| By: | Werner Roeger (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Paul J. J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)) |
| Keywords: | Energy Import Embargo, EU, Russia, Gas Market, Duopoly |
| JEL: | F50 F51 N44 Q48 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:eiiwdp:disbei314&r= |
| By: | Paul J. J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)) |
| Abstract: | The launch of Russia’s war of aggression against Ukraine on February 24th, 2022, has resulted in great suffering for the people of Ukraine and has created turning point in Europe. Western countries and Japan have imposed very comprehensive sanctions against Russia, the aggressor. The country is largely politically isolated on the international stage, but seemingly has China - still - on its side. Large movements of refugees are to be expected, along with sharp price increases for gas and - somewhat less so - for oil, but also for wheat, with Russia and Ukraine being important exporter countries of that commodity representing together a combined 28% share of the world market. Some economists have suggested Germany impose an energy import boycott against Russia. A realistic analysis, however, arrives at significantly higher losses in real income than the 0.5% to 3% found, for example, by Bachmann et al. (2022), although additional retaliatory measures (e.g., tariff increases) by Russia and other effects must indeed also be considered: -6% in terms of real income and increased unemployment rates are conceivable as an overall effect in Germany; and there will be negative Russian spillover effects to central Asian countries which also have not been considered in the Bachman et al approach. On March 23rd, President Putin declared that Russia’s energy exports to “unfriendly countries” would have to be paid for in Rubles in the future, which is a clear strategic move in terms of the international economic conflict between the West and Russia. The latter could itself impose an energy supply boycott on Germany and also other EU countries. Additional supplies from, say, the US - in the form of liquefied natural gas (LNG) - would be limited in relation to the redistribution of supplies within the EU, as the pipeline network is still poorly integrated. Poland, Bulgaria, Austria, Germany and Italy are likely to face particular problems with natural gas supplies in the event of an energy import boycott. As of May 24th, 2022, US citizens will not be allowed to accept interest payments from either private Russian companies or the Russian state; this measure is peculiar and hardly compatible with the idea of a constitutional state, since even companies from Russia that are not actually in danger of bankruptcy will be artificially pushed toward bankruptcy - with the US switching to preventing Dollar bond payments to April 6th (due to the Russian massacre in Bucha, Ukraine), the first Russian bond interest payment missed concerned Russian Railways on April 11th. The very high current and expected numbers of refugees will have positive demand effects in certain countries in 2022 and positive supply effects in overall economic production thereafter. The global economy will be marked by a new economic slowdown and higher inflation rates in 2022/23; it could face a breakup into regional “blocs” and a reduced effectiveness of international economic organizations in the event of international economic conflicts. The weakening of the international legal order should be countered by OECD countries. The figures presented by the Kiel Institute for the World Economy for combined humanitarian, financial and military support to Ukraine are grossly misleading; if one takes into account the important spending on refugees from Ukraine and the corresponding (implied) pledges by OECD countries, EU spending in favour of the Ukrainian people is significantly higher than that of the US, and Germany's spending is also significantly higher than shown in the Kiel study. A new and lasting order for peace in Europe is urgently required. An EU eastern enlargement to include Ukraine will bring about new BREXIT-type risks and could destabilize the EU considerably. |
| Keywords: | Ukraine war, Russia sanctions, economic effects of the war in Ukraine, US, EU, international economic order, aid for Ukraine |
| JEL: | F50 F51 N44 Q48 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:eiiwdp:disbei312&r= |
| By: | Simola, Heli |
| Abstract: | Russia's economic growth slowed substantially over the past decade. To improve its long-term growth outlook, Russia must deal with structural problems. While the country has not lacked for ambitious development plans, the results of late have been rather thin. We discuss some of the key challenges facing the Russian economy and policy responses. Considering Russia's recent economic policy in light of the economic literature and potential reasons for its successes and failures, we suggest the focus of the country's current economic policy framework is too narrowly drawn to achieve a significant acceleration in long-term growth. |
| Keywords: | Russia,economic policy,development plans,economic growth |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bofitb:112021&r= |
| By: | Jakub Sokolowski; Marek Antosiewicz; Piotr Lewandowski |
| Abstract: | We estimate the macroeconomic and distributional effects that a ban on fuel imports from Russia would have in Poland. We simulate the embargo as a hike in oil, gas and coal prices, and evaluate the macroeconomic effects with a dynamic general equilibrium model. We soft-link it with a microsimulation model based on Household Budget Survey data to assess the impacts on various income groups. We find that the effects of an embargo on Russian fuels would be substantial but manageable. Depending on the severity of the price hikes, we expect Poland’s GDP to be lower by 0.2–3.3% by the end of 2022, and by 2.1–5.7% by 2025. Furthermore, depending on the price increases, high-income households would spend an additional 0.2–1.3% of their incomes on energy in 2022 and 0.7–1.6% in 2025, and low-income households would spend 0.3–4.7% more of their incomes on energy in 2022 and 2.6–4.8% in 2025. We suggest direct money transfers to less affluent households, and investments in alternative gas and oil supplies, energy efficiency, renewable energy and nuclear power as instruments that could ease the negative economic impacts of the embargo. |
| Keywords: | embargo; distributional effects; microsimulation; general equilibrium |
| JEL: | H23 P18 O15 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:report:rr012022&r= |
| By: | Paul J. J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)) |
| Abstract: | The Russo-Ukrainian war has given rise to a broad discussion about adequate aid for Ukraine across the Western world and within the OECD country group in particularly. Essentially, policymakers and the wider public would like to have an economic aid indicator which allows to understand whether or not individual donor countries are carrying a "fair" share of the burden: Humanitarian aid would naturally include the commitments of OECD countries for Ukrainian refugees plus other humanitarian expenditure items. The sum of humanitarian, financial and military aid provided by various countries to Ukraine has been presented by the Kiel Institute for the World Economy (Kiel IfW) in April 2022 and thus many new data points became available, including a table with a ranking of the countries on the basis of combined aid - relative to GDP - which shows that the aid ratio of the US is larger than that of the whole EU, including EU funds for Ukraine. The IfW, however, omits the commitments with regard to refugee support made by OECD countries which, for most countries considered, indeed represents the largest share of overall support commitments for the Ukrainian people. The IfW approach is quite misleading as it ignores commitments of the respective OECD countries for Ukrainian refugees. If one includes the relevant expenditures and commitments for 2022, the donor country ranking looks quite different from the ranking calculated by Antezza et al. (2022). It is also noteworthy that the press release by the Kiel Institute for the World Economy on publication of the IfW Discussion Paper No. 2218 does not mention that the IfW summary aid indicator for support for the Ukraine does not take expenditures for Ukrainian refugees into consideration, while the paper mentions this peculiar point - this might be an error in the press release. The IfW has emphasized that its calculations show that US support clearly exceeds that of the EU in nominal terms. The Kiel IfW press release seems to have been aimed at arousing maximum media attention on the basis "bad news is good news" which might be acceptable for selling newspapers, but which is clearly in contradiction to the concept of sound research in Economics. As is shown in this research note, the commitments of EU countries (plus the EU's own commitment) - with commitments for refugees included - were about five times higher than that of the US in the period February 24th to March 27th, 2022. Moreover, the correct ranking for the sum of humanitarian, financial and military aid - including commitments for Ukrainian refugees - in the EIIW approach differs significantly in most cases from the aid-GDP ratio ranking of the Kiel IfW. In the analytical discussion, the Russia-Ukraine conflict shocks are partly viewed through the lens of the Heckscher-Ohlin theorem, the Stolper-Samuelson theorem and the Rybczynski theorem, respectively; it is argued that there is some equivalence of the Heckscher-Ohlin theorem and the Rybczynski theorem. |
| Keywords: | Foreign aid, Ukraine, Russia-Ukraine War, Expenditures on Refugee Support, OECD Countries, Media Attention, Kiel Institute for the World Economy |
| JEL: | F35 F51 H63 H84 H89 |
| Date: | 2022–05 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:eiiwdp:disbei315&r= |
| By: | Akbobek Akhmediyarova (NAC Analytica, Nazarbayev University) |
| Abstract: | In this paper we analyse the drivers of housing price fluctuations in Kazakhstan using a dynamic stochastic general equilibrium (DSGE) model with the housing market. We estimate the model with Bayesian methods using the data for the period from 2010Q1 to 2020Q4. We find that housing prices are primarily driven by housing preference shocks, rather than by price mark up disturbances or monetary policy shocks. We identify strong housing wealth effects and show that housing preference shocks of borrowers explain a vast part of the consumption volatility. Besides, we find that pension withdrawal policy plays a small role in determining the business-cycle fluctuations of Kazakhstan in the long-term period. Overall, the technology shock is key in explaining the variance in GDP of Kazakhstan, while the variation in inflation rate is mainly explained by monetary policy and foreign demand shocks. |
| Keywords: | DSGE; Housing market; Bayesian estimation; Kazakhstan. |
| JEL: | C11 E30 E32 R21 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ajx:wpaper:19&r= |
| By: | International Monetary Fund |
| Abstract: | Selected Issues |
| Date: | 2022–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/114&r= |
| By: | International Monetary Fund |
| Abstract: | The mission to Armenia took place between September 27–October 8, 2021 to assist the authorities to improve their Government Finance Statistics (GFS) compilation practices. The technical assistance (TA) mission was conducted by Ms. Ivana Jablonská and Mr. David Bailey at the request of the Ministry of Finance (MOF) and with the support of the IMF´s Middle East and Central Asia Department (MCD). The main objectives of the mission were to assist the authorities in finalizing a comprehensive sectorized list of all public sector units —known as, the public sector institutional table (PSIT) — and in compiling annual general government GFS data for 2020. |
| Date: | 2022–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/094&r= |
| By: | Florian Misch (ESM); Martin Rey (ESM) |
| Abstract: | A greater likelihood of significant asymmetric shocks, the war in Ukraine, and stretched fiscal space all underscore the importance of establishing a euro area fiscal stabilisation capacity. This paper considers the merits of a fund that provides loans for fiscal stabilisation purposes, referred to as ‘stability fund’. First, we argue that this fund could better address moral hazard and be more easily set up than other proposed schemes. Second, using quarterly data from two decades, we model eligibility and the authorities’ decision to request loans to simulate the loan portfolio of this fund had it existed all along, with the loan parameters calibrated to match what the ESM could provide. The results suggest the ESM’s current lending capacity is sufficient to host this fund, and that the expansion of fiscal space can be macroeconomically significant and larger compared to other fiscal stabilisation capacity types. |
| Date: | 2022–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:stm:dpaper:20&r= |
| By: | International Monetary Fund |
| Abstract: | Colombia’s economy rebounded strongly in 2021 with 10.6 percent growth led by pent-up domestic demand, notably private consumption. Around 66 percent of the population is fully vaccinated against Covid-19 as of end-February and the economy continues to reopen more fully. While GDP has already reached pre-pandemic levels, employment has trailed in its recovery and macroeconomic imbalances have emerged. Amid strong demand, supply constraints, and rising commodity prices, rising inflation exceeded the upper limit of the central bank’s tolerance range in 2021. With demand-led growth and higher import prices, the current account deficit widened to 5¾ percent of GDP. Under staff’s assumptions for the evolution of the pandemic, above-potential growth around 5½ percent is expected in 2022, led by robust household consumption and a continued recovery of investment and exports. External vulnerabilities remain elevated with high external financing needs and tighter financial conditions. External risks remain elevated and an intensification of the ongoing conflict in Ukraine may impart considerable volatility in financial and commodity markets. Domestic risks are also tilted to the downside—including uncertainty around the evolution of the pandemic, political uncertainty with national elections this year, and slower implementation of the infrastructure agenda and peace accords. |
| Date: | 2022–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:2022/097&r= |
| By: | Holtemöller, Oliver; Lindner, Axel; Schult, Christoph |
| Abstract: | Ein Stopp der russischen Gaslieferungen würde zu einer Rezession der deutschen Wirtschaft führen. Nicht alle Regionen wären davon gleich betroffen: Vor allem wäre dort, wo das Verarbeitende Gewerbe ein großes Gewicht hat, mit einem deutlich stärkeren Einbruch der Wirtschaftsleistung zu rechnen als andernorts. Deshalb wäre Westdeutschland und dort insbesondere der Süden stärker betroffen als der Osten Deutschlands. Dagegen spielt für die Frage, wie viele Arbeitsplätze durch einen bestimmten Rückgang der Wertschöpfung gefährdet sind, die Höhe der Arbeitsproduktivität eine ausschlaggebende Rolle. |
| Keywords: | Erdgas,Prognose,Regionalstruktur |
| JEL: | E37 Q43 R11 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iwhpno:12022&r= |
| By: | Korhonen, Iikka |
| Abstract: | This paper updates my earlier calculations on Russia's long-run growth potential using a standard growth accounting framework in which GDP growth depends on available labor, capital and efficiency in combining them, i.e. total factor productivity. Russia's economy has grown relatively slowly during the past decade, partly because of declining labor force. In my revised framework, growth recovers after the negative COVID-19 shock, but remains subdued as the working-age population continues to dwindle. Productivity growth remains lower than in the early 2000s, while average GDP growth settles at approximately 1.5% p.a. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bofitb:92021&r= |
| By: | Terry McKinley (IPC-IG) |
| Keywords: | Uzbekistan; social protection; health insurance |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:ipc:opager:502&r= |
| By: | Michael P. Dooley; David Folkerts-Landau; Peter M. Garber |
| Abstract: | Recent sanctions on the use of Russia’s international reserve assets seem likely to reduce the appeal of US dollar reserves as a “shock absorber” for international payments. But international reserves are also a means to reassure foreign investors that problematic countries will not confiscate their investments. The “collateral” motive for holding dollar reserves has been enhanced by the demonstration that the United States is willing and able to sanction misbehavior. Geopolitically risky countries now more than ever need to reassure foreign investors that their investments are safe from expropriation. We conclude that recent events will strengthen the role of the dollar as the key international reserve currency. |
| JEL: | F3 F33 F51 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29943&r= |