nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2023‒07‒17
34 papers chosen by

  1. The War in Ukraine Disrupts Agricultural Value Chains, but Trade Policy Measures Can Mitigate the Impacts By Chepeliev, Maksym; Maliszewska, Maryla; Filipa Seara E Pereira, Maria
  2. The Covid-19 pandemic, Russia-Ukraine War, and Price Uncertainty of Staples: An Application of the VECM-Asymmetric GARCH-M BEKK Method By Urak, Faruk; Bilgic, Abdulbaki; Florkowski, Wojciech J.
  3. Догоняющее развитие в условиях санкций: стратегия позитивного сотрудничества By Polterovich, Victor
  4. Implications of the Russian Invasion on the Logistical Competition for Corn Shipments from the United States and Ukraine By Wilson, William W.; Bullock, David W.; Lakkakula, Prithviraj
  5. The impact of the crisis induced by the conflict in Ukraine on firms in North Macedonia: Evidence from a micro-survey By Marjan Petreski
  6. A Theory of Price Caps on Non-Renewable Resources By Simon Johnson; Lukasz Rachel; Catherine Wolfram
  7. Republic of Poland: 2023 Article IV Consultation-Press Release; and Staff Report By International Monetary Fund
  8. (Trade) War and Peace: How to Impose International Trade Sanctions By Gustavo de Souza; Naiyuan Hu; Haishi Li; Yuan Mei
  9. War and Entrepreneurship: A Synthetic Control Study of the Russia-Ukraine Conflict By David B. Audretsch; Paul P. Momtaz; Hanna Motuzenko; Silvio Vismara
  10. Cyber operations in Russia's war against Ukraine: Uses, limitations, and lessons learned so far By Schulze, Matthias; Kerttunen, Mika
  11. From "Global Britain" to Realpolitik - the updated Integrated Review: How the United Kingdom wants to position itself as a reliable partner in a competitive global order By von Ondarza, Nicolai; Rehbaum, Dominik
  12. Russian civil society actors in exile: An underestimated agent of change By Domańska, Maria
  13. 미·중·러 전략경쟁 시기 러시아의 대중국 관계 발전과 정책 시사점(Russia’s Relations with China in the Era of US-China-Russia Strategic Competition) By Park, Joungho; Kang, Boogyun; Hyun, Seung-soo; Jeh, Sung Hoon
  14. Uncertainty about the war in Ukraine: Measurement and effects on the German business cycle By Grebe, Moritz; Kandemir, Sinem; Tillmann, Peter
  15. Energieintensive Produktion bricht stärker als während der Pandemie By Küper, Malte; Obst, Thomas
  16. How resilient is public support for carbon pricing? Longitudinal evidence from Germany By Stephan Sommer; Théo Konc; Stefan Drews
  17. How Latin America is finding path to economic prosperity again: A just transition as target By Maihold, Günther
  18. Ukrainian refugees in Germany: Escape, arrival and everyday life By Brücker, Herbert; Ette, Andreas; Grabka, Markus M.; Kosyakova, Yuliya; Niehues, Wenke; Rother, Nina; Spieß, C. Katharina; Zinn, Sabine; Bujard, Martin; Cardozo, Adriana; Décieux, Jean Philippe; Maddox, Amrei; Milewski, Nadja; Naderi, Robert; Sauer, Lenore; Schmitz, Sophia; Schwanhäuser, Silvia; Siegert, Manuel; Tanis, Kerstin
  19. South Africa: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for South Africa By International Monetary Fund
  20. Public Expenditure and Tax Policy for the Post-War Reconstruction of Ukraine By Tetiana Bogdan; Branimir Jovanović
  21. I-2. Tour du monde de la situation conjoncturelle. L’Espagne : croissance sous contraintes By Christine Rifflart
  22. New US export controls: Key policy choices for Europe. Recommendations for a robust European export control policy By Chorzempa, Martin; von Daniels, Laura
  23. The Federal Reserve’s Response to the Global Financial Crisis and Its Long-Term Impact: An Interrupted Time-Series Natural Experimental Analysis By KAMKOUM, Arnaud Cedric
  24. Attempting to set the record straight. How should the family name of Ukraine’s President be spelled? By Teixeira da Silva, Jaime A.
  25. Assessment of the fiscal stance appropriate for the euro area in 2024 By European Fiscal Board (EFB)
  26. What Do Economists Think About the Green Transition? Exploring the Impact of Environmental Awareness By Simona Malovana; Dominika Ehrenbergerova; Zuzana Gric
  27. Economic Warfare By Daniel Spiro
  28. L'impact de la guerre du Soudan de 2023 sur l'Afrique et au-delà By Kohnert, Dirk
  29. 김정은 시대 북한의 대외관계 10년: 평가와 전망(10 Years of North Korea’s External Relations in the Kim Jong-un Era: Evaluation and Prospects) By Choi, Jangho; Kim, Dawool; Rhee, Jung-Kyun; Choi, Yoojeong
  30. Examining the dependence structure between carry trade and equity market returns in BRICS countries By Makhanya, Kabelo Collen; Bonga-Bonga, Lumengo; Manguzvane, Mathias Mandla
  31. Le prix de l'inflation. Perspectives 2023-2024 pour l'économie française By Eric Heyer; Xavier Timbeau; Mathieu Plane; Elliot Aurissergues; Bruno Coquet; Ombeline Julien de Pommerol; Pierre Madec; Raul Sampognaro
  32. Sparse Warcasting By Mihnea Constantinescu
  33. The Anatomy of the Financial Inclusion Gap in the Caucasus and Central Asia By Mr. Tigran Poghosyan
  34. Republic of Armenia: First Review Under the Stand-By Arrangement and Request for Modifications of Performance Criteria and Monetary Policy Consultation Clause-Press Release; Staff Report By International Monetary Fund

  1. By: Chepeliev, Maksym; Maliszewska, Maryla; Filipa Seara E Pereira, Maria
    Keywords: Food Consumption/Nutrition/Food Safety, Agricultural and Food Policy, International Development
    Date: 2023
  2. By: Urak, Faruk; Bilgic, Abdulbaki; Florkowski, Wojciech J.
    Keywords: International Development, Agribusiness, Marketing
    Date: 2023
  3. By: Polterovich, Victor
    Abstract: The article is devoted to the elaboration of a long-term strategy for the socio-economic development of Russia. It is noted that Western civilization is in a deep crisis due to the exhaustion of the potential of the mechanisms of economic and political competition. In the fight against unfavorable trends, countries are relatively successful, where the mechanisms of collaboration in the spheres of economy and politics play a significant role. In this regard, there is a need to revise the development strategies of catching- up countries. For Russia, engulfed in a war of sanctions, this problem is especially relevant. Usually, two options are considered for its solution: a mobilization strategy, which provides for a tightening of power, and a liberalization strategy, which involves a sharp reduction in the role of the state. This paper attempts to show that the most preferable strategy is positive (not directed against third parties) collaboration, which at the first stage provides for the formation of catching-up development institutions and the reduction of inequality. As a result, as the experience of the economic miracle countries shows, it is possible to launch rapid economic growth and achieve a high level of trust of citizens in each other and in state institutions. With successful development, the role of the state should decrease, and the role of market interactions should temporarily increase. At the same time, efforts should be directed to ensure that Russia finds itself in the class of coordinated market economies with a high level of corporate social responsibility, and, by the nature of the political system, can be attributed to consensus democracies. Following the strategy of positive collaboration would contribute to the formation of a modern ideology of collaboration and, hence, to the success of further development. It is shown that such an ideology has deep roots in Russian philosophical culture. As a result of the growth of welfare, the level of technology, and civic culture, this strategy will provide Russia with a collaborative advantage, which means joining the group of the most successful countries. It is noted that the discrepancies between the United States and the European Union are of a deep nature and are determined by differences in value orientations, in cultural characteristics, in the structure of economic and political mechanisms. The above arguments give reason to hope that the strategy of positive collaboration after the resolution of the conflict in Ukraine and the inevitable loss of dominant positions by the United States will contribute to the rapprochement between Russia and the EU countries.
    Keywords: postmodernism, competition, catching-up development, civic culture, coordinated market economy, collaborative advantage
    JEL: B52 D02 D64 O20 P21
    Date: 2023–06–16
  4. By: Wilson, William W.; Bullock, David W.; Lakkakula, Prithviraj
    Abstract: The Russian invasion of Ukraine disrupted the grain flows from that region and worldwide. These changes are critical due to the war’s influence on logistical costs, routes and capacities. As a result of the invasion, Ukraine has evolved from having some of the lowest logistical costs in the world to having the highest logistical cost. Logistics are critical for international competitiveness in commodities, and due to the invasion, these functions have been severely affected. Essential features for a logistical competition include internal logistical functions and costs, quality, port capacity and ocean shipping costs, each compounded by seasonal demands. This paper’s purpose is to analyze the effects of the Russian invasion on the logistical functions and the costs for corn exports from Ukraine and its competitors using an optimized Monte Carlo simulation model. The findings indicate that before the invasion, Ukraine had logistical advantages for shipments to the European Union (EU) and was highly competitive in Indonesia and China; the United States had a logistical cost advantage over Ukraine to serve China, South Korea (from the U.S. Gulf) and Japan (from the Pacific Northwest (PNW)). The changes due to the invasion are substantial. Most important is the radical increase in shipping costs from Ukraine, reduced port capacity and export supplies. However, concurrent with the invasion were changes in some critical trade and marketing policies, thus influencing the international competition for corn.
    Keywords: Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Marketing
    Date: 2023–06–28
  5. By: Marjan Petreski
    Date: 2023–06
  6. By: Simon Johnson; Lukasz Rachel; Catherine Wolfram
    Abstract: In December 2022, following Russia’s invasion of Ukraine, a G7-led coalition of countries imposed a $60 per barrel price cap on the sales of Russian oil that use western services. This paper provides a theoretical and quantitative analysis of this new tool. We build a tractable equilibrium model in which the financially constrained exporter of a non-renewable resource optimally exerts market power, and the price of the resource varies stochastically. An important insight from this framework is that the supply curve is inelastic and can even be downward sloping, rationalizing the patterns we observe in the data. Contrary to the fears that an introduction of the price cap will cause a damaging oil supply shock, the exporter may have strong incentives to increase extraction following the introduction of a binding price cap. In fact, when the producer is large and has market power, a price cap that applies to all or most sales significantly limits the degree to which market power is used in equilibrium and stabilizes world oil prices. But if the cap is poorly enforced, or if the sanctioned state has access to a non-compliant “shadow” fleet, the cap is less effective at stabilizing world prices.
    JEL: F51 L13 L71 Q41
    Date: 2023–06
  7. By: International Monetary Fund
    Abstract: Following a strong rebound from the pandemic, the Polish economy in 2022 faced energy and food price shocks, which exacerbated inflationary pressures and slowed economic growth. With Russia’s war in Ukraine, the authorities seek to increase defense expenditures and energy security.
    Date: 2023–06–01
  8. By: Gustavo de Souza; Naiyuan Hu; Haishi Li; Yuan Mei
    Abstract: Trade sanctions are a common instrument of diplomatic retaliation. To guide current and future policy, we ask: What is the most cost-efficient way to impose trade sanctions against Russia? We build a quantitative model of international trade with input-output connections. Sanctioning countries choose import tariffs to simultaneously maximize their income and minimize Russia’s income, with different weights placed on these objectives. We find, first, that for countries with low willingness to pay for sanctions against Russia, the most cost-efficient sanction is a uniform tariff on all Russian products of about 20%. Second, if countries that are willing to pay at least US$0.70 for each US$1 drop in Russian welfare, an embargo on Russia’s mining and energy products – with tariffs above 50% on other products – is the most cost-efficient policy. Finally, if countries target politically relevant sectors, an embargo on Russia’s mining and energy sector is the cost-efficient policy, even when there is low willingness to pay for sanctions.
    Keywords: trade sanctions, tariff, tariff competition
    JEL: F13 O24
    Date: 2023
  9. By: David B. Audretsch; Paul P. Momtaz; Hanna Motuzenko; Silvio Vismara
    Abstract: Entrepreneurs are often situated in extreme environments characterized by violent conflict. Yet, war is largely a blind spot in entrepreneurship scholarship. As a first step to closing this gap, we offer a well-identified synthetic control study of entrepreneurial dynamics in the Russo-Ukrainian war. Relative to the synthetic counterfactual, Ukraine’s number of self-employed dropped by 20%, and the number of Ukrainian SMEs temporarily dropped by 14% but recovered within five years of the start of the conflict. In contrast, Russia had lost more than 1.4 million SMEs (42%) five years into the conflict. The disappearance of entrepreneurs is driven by both fewer new SMEs created and more existing SME closures. To pave the way for systematic scholarship on “war and entrepreneurship, ” our study proposes a conceptual framework integrating conflict into the theory of entrepreneurial choice and suggests numerous avenues for future research.
    Keywords: entrepreneurship, war, Russia-Ukraine conflict
    JEL: D74 L26 N44 O17
    Date: 2023
  10. By: Schulze, Matthias; Kerttunen, Mika
    Abstract: One year after Russia's invasion of Ukraine, certain assumptions about the utility of cyber operations during wartime can now be put to the test. Russian cyber salvos opened this war, but they failed to achieve their objectives in the face of a resilient cyber defender. Joint cyber/conventional warfighting is still hard to implement due to its uncertain effects, the potential for spill-over, malware development cycles, and differing operational tempos. Cyber operations against Ukraine have not (yet) achieved major strategic effects in reducing Ukraine's capacity to resist. Additionally, Russian information operations targeting Ukrainian and Western audiences fell on deaf ears. The greatest value of cyber operations therefore still appears to lie in their intelligence and reconnaissance functions.
    Keywords: cyber operation, cyber attack, cyber forces, cyber capabilities, counter-force capability, cyber warfare, Russia-Ukraine war, Cyber Pearl Harbour, Operation Glowing Symphony, Advanced Persistent Threat, APT, Computer Emergency Response Team of Ukraine, CERT-UA
    Date: 2023
  11. By: von Ondarza, Nicolai; Rehbaum, Dominik
    Abstract: Almost two years after the publication of the "Integrated Review", the British government has updated its security strategy. This "refresh" is primarily intended to adapt to the rapidly advancing development towards a contested and fragmented global order. Without indicating a radical shift, the strategy specifies the British response to China and Russia and places a special focus on the role of partners as well as on national resilience. Following the leadership change in the British government to Rishi Sunak, the paper sets out a more pragmatic approach for future cooperation with the European Union (EU). In order to advance the implementation of the Integrated Review and strengthen Euro-Atlantic relations, Germany and the EU should seize the momentum and deepen their cooperation with London.
    Keywords: United Kingdom, Integrated Review (IR21), NATO, Brexit, United States, European Union (EU), France, Germany, China, Russia, Indo-Pacific, Euro-Atlantic relations, war Ukraine, Covid 19 pandemic, Rishi Sunak
    Date: 2023
  12. By: Domańska, Maria
    Abstract: The current wave of emigrants from Russia can play an important role in the country's political transition in the long term. As Russia's aggressive wars are a consequence of the personalist dictatorship that has embraced the imperialist idea, a regime change towards a more pluralistic model of rule would be in the West's strategic interest.
    Keywords: Russia, emigrants, political transition, Ukraine invasion, repression against the democratic opposition, civil society, NGOs, Alexei Navalny
    Date: 2023
  13. By: Park, Joungho (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Kang, Boogyun (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)); Hyun, Seung-soo (Korea Institute for National Unification); Jeh, Sung Hoon (Hankuk University of Foreign Studies)
    Abstract: 이 보고서는 미·중·러 전략경쟁의 본격화 및 갈등의 심화 속에서 러·중 간의 전략적 관계 발전에 대한 종합적인 연구 작업으로 수행되었다. 새로운 국제질서의 형성 과정에서 러시아의 대중국 전략의 기본 방향과 의미, 분야별(정치, 외교, 안보, 군사, 경제, 사회, 문화) 협력의 세부 내용과 주요 특징을 분석하였다. 특히 이 연구는 러시아의 시각과 입장에서 러ㆍ중 간의 주요 분야별 협력 방향과 수준에 대한 종합적 평가를 토대로 한국에 유용한 정책적 시사점을 도출하고자 했다. This study comprehensively examines the development of Russia’sstrategic relationship with China amid intensifying strategic competition among the United States, China, and Russia. Specifically, we analyze the basic meaning and direction of Russia’s strategy toward China in the process of shaping a new global order, and the keyfeatures and characteristics of cooperation between the two countries in a wide range of fields spanning politics, diplomacy, security, military, economy, society, and culture. Accordingly, this research seeks to derive useful policy implications for Korea based on evaluation of the direction and level of Russia-China cooperation from the Russian perspective.This study consists of four major chapters. Chapter 2 examines the background and strategic significance of Russia’s political, diplomatic, and security relations with China. The deterioration of US relations with China and Russia, which is currently progressing at the global level, is acting as a decisive factor pushing Russia and China closer to each other. In order to grasp the dynamics of US- China-Russia relations and Russia’s perception of the international order, we seek theoretical and historical approaches to the strategic trianglerelationship, while examining the possible formation of a new type of triangle relationship. Based on this, the chapter describes Russia’s perception of China and its policy direction, as well as the evaluation and prospects of Russia-China relations. Chapter 3 analyzes the background and strategic significance ofRussia’s economic, trade, and industrial relations with China. First, Russia’s perception of economic security and the background of deepening economic relations with China are comprehensively identified. In particular, we examine the opportunities and constraints associated with Russia-China cooperation in the fields of advanced technology, energy, and finance, which are key strategic areas for strengthening Russia’s economic security in the face of intenseWestern sanctions against its economy.(the rest omitted)
    Keywords: 경제관계; 경제안보; economic relations; security
    Date: 2022–12–30
  14. By: Grebe, Moritz; Kandemir, Sinem; Tillmann, Peter
    Abstract: We assemble a data set of more than eight million German Twitter posts related to the war in Ukraine. Based on state-of-the-art methods of text analysis, we construct a daily index of uncertainty about the war as perceived by German Twitter. The approach also allows us to separate this index into uncertainty about sanctions against Russia, energy policy and other dimensions. We then estimate a VAR model with daily financial and macroeconomic data and identify an exogenous uncertainty shock. The increase in uncertainty has strong effects on financial markets and causes a significant decline in economic activity as well as an increase in expected inflation. We find the effects of uncertainty to be particularly strong in the first months of the war.
    Keywords: war, Twitter, geopolitical risk, machine learning, business cycle
    JEL: D8 E3 G1
    Date: 2023
  15. By: Küper, Malte; Obst, Thomas
    Abstract: Der Ausbruch des russischen Angriffskriegs in der Ukraine hat zu großen Verwerfungen auf den europäischen Energiemärkten geführt. Während die von vielen erwartete tiefe Rezession im Euroraum im Jahr 2022 ausblieb, zeigt ein Blick auf die energieintensive Produktion in Deutschland deutliche Gefahren für das kommende Jahr auf.
    Date: 2023
  16. By: Stephan Sommer; Théo Konc; Stefan Drews
    Abstract: The success of climate policies depends crucially on the dynamics of public support. Using unique longitudinal data from three surveys conducted between 2019 and 2022, we study the variations of public support for carbon pricing in Germany. The period includes two relevant events: the introduction and ramping up of carbon pricing in Germany and the exogenous increase in energy prices following the Russian invasion of Ukraine. Using panel methods, we show that support is very persistent over time and might have increased slightly more recently. However, people who experience high energy costs display a lower support. Regarding revenue use, we detect that social cushioning has become more popular after the introduction of carbon pricing. Our findings suggest that it is crucial to gather enough support before implementing climate policies.
    Keywords: Climate change mitigation, political economy, panel methods
    JEL: D12 H23 Q58
    Date: 2023–06–20
  17. By: Maihold, Günther
    Abstract: The traditional image of Latin America as a troubled region seems to continue even after the Covid-19 crisis, this time in the wake of the war in Ukraine and the sanctions imposed by the West. Inflationary pressures, budget deficits and the danger that broad sections of the population will slip into poverty are fuelling negative scenarios. There are initial indications that some countries are already experiencing payment difficulties. Demands from Latin American governments for debt relief or the renegotiation of foreign debt are being put on the agenda as part of a reorientation of the development model towards sustainability and climate protection criteria. This requires a far-reaching structural change, away from the traditional commodity-based economies and towards an environmentally and socially compatible development path. Germany and Europe must also shift course by contributing to the conservation of natural resources and not just to their exploitation.
    Keywords: Latin America, economic development model, sustainability, climate protection, Just Transition, inflationary pressures, budget deficits
    Date: 2023
  18. By: Brücker, Herbert (Institute for Employment Research (IAB), Nuremberg, Germany ; Humboldt Univ.); Ette, Andreas (BiB); Grabka, Markus M. (SOEP); Kosyakova, Yuliya (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Bamberg); Niehues, Wenke (BAMF-FZ); Rother, Nina (BAMF-FZ); Spieß, C. Katharina (BiB); Zinn, Sabine (SOEP); Bujard, Martin (BiB); Cardozo, Adriana (SOEP); Décieux, Jean Philippe (BiB); Maddox, Amrei (BAMF-FZ); Milewski, Nadja (BiB); Naderi, Robert (BiB); Sauer, Lenore (BiB); Schmitz, Sophia (BiB); Schwanhäuser, Silvia (Institute for Employment Research (IAB), Nuremberg, Germany); Siegert, Manuel (BAMF-FZ); Tanis, Kerstin (BAMF-FZ)
    Abstract: "The Institute for Employment Research (IAB), the Federal Institute for Population Research (BiB), the Research Centre of the Federal Office for Migration and Refugees, and the Socio-Economic Panel at DIW Berlin have surveyed 11, 225 Ukrainian refugees in Germany from August to October 2022. The survey can be extrapolated to the refuge population who has arrived since the beginning of the war at February 24, 2022, to June 8, 2022, in Germany. The results show that the majority of refugees from Ukraine report war as the main flight motive, while personal contacts and respect of human rights were the main reasons to choose Germany as a destination. Roughly 80 percent of adult refugees are women. About the half lives together with minor-aged children, about 80 percent without a partner. Some 70 percent have tertiary education degrees. Yet, only 4 percent report good or very good, another 14 percent fair German language proficiency. About 50 percent visits or has already completed a German language class. 17 percent are employed, with some 70 percent of those performing qualified jobs. The health status of the refugee population is good, but life satisfaction well below the German population average. Above one-third of the refugees plans to stay in Germany forever or for several years, about one-third aim to leave Germany by the end of war, while 27 percent are not yet certain about their staying perspectives." (Author's abstract, IAB-Doku) ((en))
    Keywords: Bundesrepublik Deutschland ; Ukraine ; Aufenthaltsdauer ; IAB-Open-Access-Publikation ; IAB-BiB/FReDA-BAMF-SOEP-Befragung ; berufliche Integration ; Bildungsniveau ; Deutsch als Fremdsprache ; Geflüchtete ; Frauen ; Geschlechterverteilung ; Gesundheitszustand ; Herkunftsland ; Lebenssituation ; Rückwanderungsbereitschaft ; Spracherwerb ; Sprachkenntnisse ; Wanderungsmotivation ; Wohnsituation ; Zufriedenheit ; Zukunftsperspektive ; 2022-2022
    Date: 2023–06–12
  19. By: International Monetary Fund
    Abstract: South Africa’s strong economic recovery from the COVID-19 pandemic is petering out. Growth moderated from 4.9 percent in 2021 to 2.0 percent in 2022 as the country was buffeted by Russia’s war in Ukraine, global monetary policy tightening, severe floods, and an unprecedented domestic energy crisis. Inflation rose above the target band though inflation expectations remained anchored. The current account moved back into a deficit after a temporary commodity-price driven surplus.
    Date: 2023–06–06
  20. By: Tetiana Bogdan; Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Public spending will play the decisive role in the reconstruction of Ukraine, in rendering aid to the population, providing emergency services, reconstructing infrastructure and driving industrial development in the coming years. For economic recovery and sustainable development in the post-war period, defining the volume and structure of the main public expenditure categories in the medium run are essential. The report outlines priorities and timelines for public funds allocation in the areas of transport and electric power networks, the recovery of agricultural farms, restoration of social infrastructure, reconnecting people to educational and health care services, rebuilding destroyed housing stock and development of the modern defence sector. The role of foreign aid in the post-war recovery is highlighted and efficient mechanisms for coordination and reconciliation of Ukrainian public expenditure with external donor funding are suggested. Moreover, the authors propose tax reform measures with a focus on personal income taxation, social security contributions and improving tax collections that are targeted at financing Ukraine’s reconstruction needs. A debt sustainability analysis (DSA) for the period 2023-2026 is undertaken with probabilistic judgments regarding the trajectory of public debt and the availability of financing. The results indicate that raising the share of foreign grants (vs. loans) plus substantial haircuts to the nominal values of debt will be necessary for supporting Ukraine’s debt sustainability.
    Keywords: Ukraine, public expenditure, tax reform, post-war reconstruction, debt sustainability
    JEL: H56 H20 H41 H63
    Date: 2023–06
  21. By: Christine Rifflart (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: Comme partout, la reprise en Espagne aura été interrompue à l'été 2022 par la guerre en Ukraine et les conséquences inflationnistes qu'elle a engendrées. Á la perte de pouvoir d'achat du revenu des ménages et à la montée des incertitudes qui brident les comportements d'achats, s'ajoutent depuis l'été dernier, le resserrement monétaire conduit par la BCE et le désengagement progressif de la politique budgétaire de soutien à l'économie face aux conséquences de la guerre en Ukraine. Sur l'ensemble de l'année 2022, la croissance du PIB affiche un score honorable de 5, 5 %, comme en 2021, mais l'acquis en début d'année 2023 n'est plus que de 0, 8 point (contre 3, 6 points début 2022). En 2023 et 2024, le ralentissement est marqué : la croissance devrait avoisiner 1, 6 % et 2, 2 % respectivement et l'inflation devrait converger vers 3 % dès la mi 2024.
    Date: 2023–04
  22. By: Chorzempa, Martin; von Daniels, Laura
    Abstract: In response to Russia's attack on Ukraine, the United States and 37 countries formed a coalition in February 2022 to implement a barrage of export controls outside of any formal arrangement. By contrast, US controls on China are often unilateral, such as its October 2022 measures on semiconductors that went ahead without explicit consent, let alone a commitment by its allies to join. But to deny China access to 'dual-use' technology, unilateral export controls will not be effective. As European Commission President Ursula von der Leyen announced during her visit to the White House, the European Union (EU) wants to renew its export controls on dual-use products and new technologies and to coordinate them more closely with US measures. That means that member states will need to develop a common position on the scope of their export controls - including the extent of their alignment with the United States - as well as ways forward with multilateral controls of dual-use goods, given the freeze of the Wassenaar Arrangement due to Russia's actions.
    Keywords: Russia's attack on Ukraine, China, Huawei, export controls, European Commission, "dual-use" technology, Wassenaar Arrangement
    Date: 2023
  23. By: KAMKOUM, Arnaud Cedric
    Abstract: This paper examines the monetary policies the Federal Reserve implemented in response to the Global Financial Crisis. More specifically, it analyzes the Federal Reserve’s quantitative easing (QE) programs, liquidity facilities, and forward guidance operations conducted from 2007 to 2018. The essay’s detailed examination of these policies culminates in an interrupted time-series (ITS) analysis of the long-term causal effects of the QE programs on U.S. inflation and real GDP. The results of this formal design-based natural experimental approach show that the QE operations positively affected U.S. real GDP but did not significantly impact U.S. inflation. Specifically, it is found that, for the 2011Q2-2018Q4 post-QE period, real GDP per capita in the U.S. increased by an average of 231 dollars per quarter relative to how it would have changed had the QE programs not been conducted. Moreover, the results show that, in 2018Q4, ten years after the beginning of the QE programs, real GDP per capita in the U.S. was 14% higher relative to what it would have been during that quarter had there not been the QE programs. These findings contradict Williamson’s (2017) informal natural experimental evidence and confirm the conclusions of VARs and new Keynesian DSGE models that the Federal Reserve’s QE policies positively affected U.S. real GDP. The results suggest that the current U.S. and worldwide high inflation rates are likely not because of the QE programs implemented in response to the financial crisis that accompanied the COVID-19 pandemic. They are likely due to the unprecedentedly large fiscal stimulus packages used, the peculiar nature of the financial downturn itself, the negative supply shocks from the war in Ukraine, or a combination of these factors. To the best of my knowledge, this paper is the first study to measure the macroeconomic effects of QE using a design-based natural experimental approach.
    Date: 2023–01–05
  24. By: Teixeira da Silva, Jaime A.
    Abstract: Ukraine’s President, Volodymyr Zelenskyy, became a globally recognized persona since 2019, even more so now as a result of the ongoing Russo-Ukrainian war. Despite that fame and recognition, it is not uncommon to observe some variations in the spelling of the President’s family name, Zelenskyy, either as Zelenskyi, Zelenskiy, Zelensky, or Zelenski, even in mainstream English media and/or English academic literature. The apparent reason for this variation is the lack of Latinization of the name from the Ukrainian form and/or the recognition of the double-consonant “yy” in English. As equally as the public expects unbiased and balanced news – an unlikely phenomenon during a war – so too should news outlets pay attention to small, but important details, such as the accurate spelling of publicly highly visible personalities, such as President Zelenskyy. This paper serves to provide a culturally accurate version of the representation of the family name of the current President of Ukraine, with the hope that it may be used in a more standardized manner in news and in academic literature.
    Date: 2023–06–11
  25. By: European Fiscal Board (EFB)
    Abstract: On 28 June 2023, The European Fiscal Board (EFB) published its assessment of the appropriate fiscal stance for the euro area in 2024. The report recommends a restrictive fiscal impulse and considers that adjustment remains particularly important for high-debt countries. The war in Ukraine aggravated inflation and triggered a terms-of-trade shock larger than that experienced during the oil crises of the 1970s, reducing euro area real income by more than 2% of GDP in 2022. However, with the help of the counter terms-of-trade shock as energy prices receded, EU and national efforts to contain the economic crisis have subsequently been successful overall. In 2024, growth is expected to remain solid and labour markets exceptionally tight. In view of the announced deactivation of the severe economic downturn clause at the end of this year, the Commission’s surveillance package adopted in May includes specific quantitative fiscal guidance for 2024 in line with current fiscal rules. This guidance implies a restrictive fiscal impulse of close to 0.5% of GDP for the euro area, without taking into account the recommended phase-out of energy support measures estimated at 1 ¼ % of GDP. At the same time, based on current policies, the Commission projects a reduction in discretionary fiscal support 0.8% of GDP in 2024. Professor Niels Thygesen, Chair of the EFB, stated: “The Commission guidance would imply that Member States use part of the roll-back of energy measures for new fiscal initiatives. The EFB considers that such developments would not amount to an appropriate fiscal stance for the euro area”. He clarified: “Barring new negative developments, an improvement in the structural primary balance beyond the 0.8% of GDP projected by the Commission would appear to be appropriate, with a country distribution of extra efforts linked to well-identified fiscal risks.” The recommended fiscal impulse can help mitigate inflationary pressure and facilitate the ECB’s effort to achieve its inflation target.
    Date: 2023–06–28
  26. By: Simona Malovana; Dominika Ehrenbergerova; Zuzana Gric
    Abstract: We surveyed economics and finance professionals on the transition to a low-carbon economy, assessing risks, opportunities, and stakeholder responsibilities. Findings reveal that respondents view the transition as an opportunity for the financial sector, with modest increase in banking risks. Most respondents agreed that governments hold primary responsibility for climate mitigation policies, with carbon tax as the favored solution. Additionally, respondents perceived the COVID-19 to have a neutral or positive impact on the transition, while the Ukraine war a strong negative impact. Notably, opinions differ based on environmental awareness and professional roles, with environmentally conscious individuals expressing more optimism.
    Keywords: Carbon footprint, climate finance, climate policy, environmental awareness, expert survey
    JEL: G12 G14 Q54
    Date: 2023–05
  27. By: Daniel Spiro
    Abstract: What actions should we expect countries to take when engaged in economic warfare? This paper first shows that the goal of winning a war implies a very simple and intuitive objective of economic warfare: maximize one’s own less the opponent’s (weight-adjusted) payoff. This objective function is then applied to a number of canonical strategic economic environments showing how warfare transforms them. In a warfare-equilibrium between a buyer and a seller, the traded quantity is lower than in peace but, surprisingly, the price may be lower. The analysis shows when trade will altogether collapses in war and when trade will persist between the parties despite it. A prisoner’s-dilemma game (e.g., monopolistic competition or climate-change mitigation) remains a prisoner's-dilemma game also in war, and cooperation may be impossible also under infinite repetition. A coordination game with heterogeneous preferences (e.g., choosing technological standard) in war collapses to either deliberate miscoordination or to ‘matching pennies’ where one country is trying to imitate the other which is trying to avoid this. The results are interpreted through the lens of the current economic warfare between Russia and the West.
    Keywords: economic warfare, conflict, sanction, trade
    JEL: C72 D74 F51
    Date: 2023
  28. By: Kohnert, Dirk
    Abstract: For decades, the history of Sudan, Africa's third largest country with around 46 million inhabitants, has been marked by violent clashes between the northern, Muslim and Arab military elites of the capital Khartoum at the expense of the civilian population. Since Sudan gained independence in 1956, there have been 16 attempted coups, six of which were successful. That was more than in any other country on a continent that has itself seen more coups than any other region in the world. Two civil wars between the government in Khartoum and the southern regions claimed around 1.5 million victims. In addition, the ongoing conflict in the western Darfur region has killed more than 200, 000 people and displaced two million people. In these conflicts, borders mean little. Control of resources and subjects is the primary objective, and forces arising in the borderlands seek revenge on the despised metropolitan elites. Sudan's geopolitical importance in a volatile region bordering the Red Sea, the Sahel and the Horn of Africa, as well as its agricultural prosperity, attracted regional and global actors and hampered the successful transition to civilian-led government and sustainable development. In addition to Great Britain, the former colonial power, Russia, the USA, Saudi Arabia, the United Arab Emirates and other neighbouring countries were fighting for influence in Sudan, including Ethiopia, Chad and South Sudan. They, too, were affected by political unrest and conflict and suffered under the burden of Sudanese refugees fleeing the fighting to neighbouring countries. The British colonial rulers had already used existing differences to divide the population according to ethnic and regional affiliations, a practice that survives to this day. Militia activism deepened divisions among rebel supporters. This divide-and-conquer policy corresponded to a well-established tactic used by African governments in ethnic civil wars, often exploiting the militias to encourage and facilitate ethnic migration by integrating the militias into the national army. Transnational, well-entrenched criminal networks involved in drug-, arms- and human trafficking also stood ready to take advantage of the chaos. This made Sudan one of the most fragile countries in the world. Sudan's collapse would not only shake its neighbours, but could also upset several other African countries, including fragile states in the Sahel, and East and North Africa. The side effects of such an incalculable conflict zone and the resulting chaos would also affect Western Europe, which is already suffering from the influx of refugees from Syria and other war zones in the Middle East and Africa.
    Keywords: Soudan; conflit soudanais de 2023; Soudan du Sud; Afrique subsaharienne; trafic d'armes; trafic de drogue; famine; réfugiés; migration; développement durable; démocratisation; post-colonialisme; secteur informel; commerce international; nationalisme; Russie; Grande-Bretagne; Pakistan; APD; ONG; études africaines;
    JEL: E26 F22 F24 F35 F51 F52 F54 F63 H12 H27 H56 H77 H84 I31 J46 J61 L31 N17 N37 N47 N97 O17 O55 Z13
    Date: 2023–06–09
    Abstract: 본 연구는 김정은 위원장 집권 10년을 정권 승계기(2011년 12월~2012년), 집권 1기(2013~17년), 집권 2기(2018~21년)로 구분하여 각 집권 시기별로 북한이 추진하였던 대외정책의 특징을 규명하고, 이를 바탕으로 북한경제의 변화 방향을 전망하는 것이 목적이다. 이를 위해 북한 대외 환경 변화와 북한의 정책적인 대응, 대외무역, 양자관계(중국, 러시아, 미국, 일본), 다자관계(UN 기구, 다자협의체)를 검토하였다. 연구결과 ① 김정은 위원장은 북한식 방식(생산수단의 사회적 소유, 국영기업 집단경영)으로 경제성장의 기반을 만드는 체제 내 개혁을 시도하였으나(2013~17), ② 핵무기 개발을 매개로 대외여건이 악화(2016~현재)되고, ③ 예상치 못했던 하노이 회담 결렬(2019.2)과 코로나19 확산(2020.1)으로 대외협력을 중단(2020~22)하면서, ④ 매우 낮은 성과만을 거둔 채 심각한 경제난에 직면한 것으로 평가할 수 있다. ①과 ②는 집권 1기에 나타난 특징이고, ③과 ④는 집권 2기에 나타난 특징으로 요약할 수 있다. The purpose of this research is to investigate the characteristics of North Korea’s foreign policy that it pursued by dividing Chairman Kim Jeong-un’s reign into three segments, Ascension to Power (2011 Dec-2012), First Regime (2013-2017) and Second Regime (2018-2021), and based on these findings, predict the direction of North Korea’s changing economy. For this, we reviewed the changes in North Korea’s surrounding foreign landscape its policy responses, foreign trade, bilateral relations (China, Russia, the United States, Japan) and multilateral relations (UN Agencies, Multilateral Councils). In chapter two, we introduced the changes that North Korea faced during the ten years of Chairman Kim Jeong-un’s regime with thesurrounding foreign landscape and its domestic policy responses. During the First Regime, we reviewed (1) the May 24th Measures and the strained inter-Korean relations causing North Korea’s economy to be increasingly dependent on China (2) Deterioration of North Korea-China relations after Jang Song-thaek's execution, (3) China’s tightening of anthracite (hard coal) environmental regulations, (4) UN Security Council’s tougher sanctions on North Korea, (5) implementation of economic reforms such as North Korean-style economic management for domestic economicpolicy, (6) designation of Special Economic Zone to stimulate foreign trade and foreign investment, (7) real estate development to build high-rise apartments and amusement facilities, (8) declaration of completing the simultaneous economic and nuclear development after North Korea’s nuclear test.During the Second Regime, we discussed the changes in both domestic and foreign landscape, in addition to North Korea’s policies, (9) UN Security Council’s fully-fledged implementation of sanctions on North Korea, (10) support from the international community for the Korean peninsula to show mood of conciliation, (11) The Hanoi Summit ending in failure (12) borders closed due to COVID-19, for domestic policy, (the rest omitted)
    Keywords: 북한경제; 경제관계; North Korean Economy; Economic Relations
    Date: 2022–12–30
  30. By: Makhanya, Kabelo Collen; Bonga-Bonga, Lumengo; Manguzvane, Mathias Mandla
    Abstract: This paper contributes to the literature on carry trade by investigating the dynamic correlation and the dependence structure between the US-dollar carry trade and equity markets in the BRICS economies during sample observations that include regular and crisis periods. Furthermore, the nonlinear Granger causality test based on the feed-forward neural networks (FFNN) model is used to assess how global volatility predicts the dynamic correlation between the US-dollar carry trade and equity markets in BRICS. The paper finds that the dynamic correlations between carry trade and equity markets in BRICS are more pronounced during most global crises. Moreover, the results of the SJC model showed that the lower tail dependence between the two series is higher during the various crises. Furthermore, the results of the empirical analysis show that global volatility predicts the dynamic correlations between carry trade and equity markets in BRICS only during crises. Asset managers and investors can benefit from this paper's findings regarding portfolio diversification, risk management, asset allocation, and hedging when dealing with equity assets and carry trades.
    Keywords: Carry trade, BRICS, dynamic conditional correlation, copula.
    JEL: C1 F3 G15
    Date: 2023
  31. By: Eric Heyer (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Xavier Timbeau (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Mathieu Plane (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Elliot Aurissergues (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Bruno Coquet; Ombeline Julien de Pommerol (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Pierre Madec (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Raul Sampognaro (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)
    Abstract: La reprise de l'activité post-Covid a été violemment freinée par de multiples événements, en premier lieu les conséquences de l'invasion de l‘Ukraine par la Russie. La crise énergétique, le retour du spectre de l'inflation, les tensions internationales et les difficultés d'approvisionnement, la remontée brutale des taux… l'ensemble de ces chocs amputeraient la croissance du PIB de 3 points sur trois ans malgré les mesures budgétaires déployées. Si le reflux des prix de l'énergie depuis le pic de l'été 2022 devrait permettre d'éviter officiellement une récession, l'économie française ne devrait cependant croître que de 0, 8 % en 2023, marquée encore par la diffusion du choc monétaire et énergétique. En 2024, sous l'hypothèse d'une relative stabilité des prix de l'énergie et sans crise financière majeure, la croissance du PIB serait de 1, 2 %. La croissance de l'activité serait principalement amputée par la diffusion de la hausse des taux et une politique budgétaire plus restrictive. Tirée par les prix de l'alimentaire, l'inflation resterait élevée jusqu'à la fin de l'année 2023 oscillant entre 5, 5 % et 6, 5 %. Elle commencerait à se dégonfler seulement à partir de 2024 pour converger vers les 3 % à la fin de l'année prochaine. Au total, l'inflation mesurée par l'IPC, augmenterait en moyenne de 5, 8 % en 2023 et de 3, 8 % en 2024.
    Date: 2023–04–03
  32. By: Mihnea Constantinescu (National Bank of Ukraine; University of Amsterdam)
    Abstract: Forecasting economic activity during an invasion is a nontrivial exercise. The lack of timely statistical data and the expected nonlinear effect of military action challenge the use of established nowcasting and short-term forecasting methodologies. This study explores the use of Partial Least Squares (PLS) augmented with an additional sparsity step to nowcast quarterly Ukrainian GDP using Google search data. Model outputs are benchmarked against both static and dynamic factor models. Preliminary results outline the usefulness of PLS in capturing the effects of large shocks in a setting rich in data, but poor in statistics.
    Keywords: nowcasting, quarterly GDP, Google Trends, machine learning, partial, least squares, sparsity, Markov blanket
    JEL: C38 C53 C55 E32 E37
    Date: 2023–06
  33. By: Mr. Tigran Poghosyan
    Abstract: This paper analyses how financial inclusion in the Caucasus and Central Asia (CCA) compares to peers in Central and Eastern Europe (CEE). Using individual-level survey data, it shows that the probability of being financially included, as proxied by account ownership in financial institutions, is substantially lower across gender, income groups, and education levels in all CCA countries relative to CEE comparators. Key determinants of this financial inclusion gap are lower financial and human development indices, weak rule of law, and physical access to bank branches or ATMs. This suggests that targeted policies aimed at boosting financial and human development, strengthening the rule of law, and supporting fintech solutions can broaden financial inclusion in the CCA.
    Keywords: Caucasus and Central Asia; financial inclusion; financial access; estimation result; CEE comparator; CCA country; IMF working paper 23/109; CEE peer; Financial sector development; Financial account; Financial sector; Income; Global; Central Asia and the Caucasus
    Date: 2023–05–26
  34. By: International Monetary Fund
    Abstract: The Stand-By Arrangement (SBA) is off to a good start, and the economic outlook is generally positive. Real GDP growth reached 12.6 percent in 2022, driven by robust consumption and a surge in inflow of income, capital, business, and labor. Growth is expected to decelerate but remain robust in 2023. Headline inflation fell to 3.2 percent (year-on-year) in April, including due to base effects, lower food inflation, dram appreciation, and monetary policy tightening. Risks to the outlook are elevated, requiring the continuation of strong policies to build resilience further.
    Date: 2023–06–13

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.