nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2023‒11‒20
twelve papers chosen by
Alexander Harin, Modern University for the Humanities

  1. Determinants of invoice currency selection by Russian exporters By Kuznetsov, Dmitrii (Кузнецов, Дмитрий)
  2. The Effects of Rising Prices on Maize Production in Western African Countries By Marco Rogna
  3. International trade in the wake of multiple shocks: OECD global trade monitor By OECD
  4. Is the Price Cap for Gas Useful? Evidence from European Countries By Francesco Ravazzolo; Luca Rossini
  5. Modern approaches to modeling the function of household consumption on microeconomic data By Shapor, Maria (Шапор, Мария)
  6. FOOD DEVELOPMENT STRATEGIES OF RUSSIA AND THE USA: A COMPARATIVE ANALYSIS By Nikulin, Alexander (Никулин, Александр); Kurakin, Alexander (Куракин, Александр); Trotsuk, Irina (Троцук, Ирина)
  7. Electricity Market Crisis in Europe and Cross Border Price Effects: A Quantile Return Connectedness Analysis By Do, Hung Xuan; Nepal, Rabindra; Pham, Son Duy; Jamasb, Tooraj
  8. Import Price Reaction to the Ruble Exchange Rate and Leaving the Russian market by Foreign Suppliers By Firanchuk, Alexander (Фиранчук, Александр)
  9. Geoeconomic Fragmentation and Commodity Markets By Mr. Jorge A Alvarez; Mehdi Benatiya Andaloussi; Chiara Maggi; Alexandre Sollaci; Martin Stuermer; Petia Topalova
  10. Restoration of destroyed apartment buildings pushes housing property transformation in Ukraine By Andrii Shcherbyna; Vsevolod Nikolaiev
  11. Sexual-Orientation Discrimination and Biological Attributions: Experimental Evidence from Russia By Gayane Baghumyan
  12. International Mobility of Inventors and Innovation: Empirical Evidence from the Collapse of the Soviet Union By Gaetan de Rassenfosse; Gabriele Pellegrino

  1. By: Kuznetsov, Dmitrii (Кузнецов, Дмитрий) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The presented paper empirically accesses the determinants of invoice currency choice by Russian exporters. The relevance of the work is dictated by the sanctions imposed against Russia, which, among other things, make international settlements in the dominant currencies difficult and facilitate the transition of Russian exporters and importers to settlements in other currencies. The existing economic literature considers the invoice currency as one of the most important factors of the magnitude of the exchange rate passthrough into prices and quantities. The basic assumption of such models is short-term price rigidity in terms of invoice currency, which is in line with the data. The dominant view is that the choice of contract currency made by exporters based on the desired medium-term exchange rate pass-through, which in turn depends on company’s share in the market and the intensity of imported components using. In this paper using the detailed data of customs statistics of the Russian Federation it is show that key determinants of the Russian exporter’s contract currency choice are the competitor’s choice of the contract currency, the firm’s market share, the invoice currency import structure and firm productivity, as well as the degree of differentiation of the exported product. The main conclusion is that the currency structure of export payments will change due to changes in the currency structure of imports, and in many product markets the short-term stability of the share of Russian exporters will suffer, including due to difficulties in using the US dollar as the currency for nominating exports.
    Keywords: iexports, imports, dominant currencies, contract currency, invoice currency, microdata, strategic complementarities, differentiated products
    JEL: L23 F14
    Date: 2023–10–24
  2. By: Marco Rogna (European Commission - JRC)
    Abstract: The intensification of the Russo-Ukrainian war started in February 2022 with the Russian invasion of Ukraine has generated a dramatic increase in the price of several goods. In particular, energy, gas and oil have been the most interested by this spike in prices, followed by several agricultural commodities. Fertilizers, whose production is energy intensive and/or directly dependent from oil derivatives, have also experienced a sharp increase in prices. This has risen concerns for food insecure countries, particularly in Africa, since, besides a lower possibility to purchase food commodities on the international market, they will likely decrease their own production due to a lower utilization of fertilizers. Quantifying this potential decrease in agricultural production is important in order to fully assess their vulnerability in terms of food security. The present paper tries to accomplish this task by forecasting the change in maize production in 2022 and 2023 compared to 2021 in seven Western African countries. We find an overall decline in maize production of 10% circa in both years with a strong heterogeneity among countries. Trivial users of fertilizers, such as Niger, experience a very modest decline in production (less than 2%) whereas others, such as Benin and Togo, have a double digit decline: approximately 13% the former and 32% the latter.
    Keywords: Crop models; Food security; Maize yields; Western Africa; Yields forecast.
    JEL: Q12 Q17 Q18
    Date: 2023–09
  3. By: OECD
    Abstract: In the midst of the recovery from the COVID-19 pandemic, trade and economic growth face new challenges as the Russian Federation’s large-scale war against Ukraine has increased uncertainty and tensions along supply chains and the People’s Republic of China’s trade performance has fallen short of expectations. Merchandise trade is recovering slowly and has been dampened by high and volatile commodity and energy prices, coupled with monetary tightening. Some durable goods, such as motor vehicles, have not regained their pre-pandemic share in global trade. Services trade has yet to recover losses incurred during the pandemic, with travel services in particular recovering slowly. Russia’s trade is adjusting as the war continues, with repercussions for commodities markets. This report uses detailed trade data to monitor recent developments in trade in goods and services and in commodity markets.
    Keywords: China, Economic recovery, Russia, Transport
    JEL: F13 F14 F51 Q02
    Date: 2023–11–06
  4. By: Francesco Ravazzolo (Norwegian Business School and Free-University of Bozen-Bolzano); Luca Rossini (University of Milan and Fondazione Eni Enrico Mattei)
    Abstract: Since Russia’s invasion of Ukraine, many countries have pledged to end or restrict their oil and gas imports to curtail Moscow’s revenues and hinder its war effort. Thus, the European ministers agreed to trigger a cap on the gas price. To detect the importance of the price cap for gas, we provide a mixture representation for the gas price to detect the presence of outliers made by a truncated normal distribution and a uniform one. We focus our analysis on Germany and Italy, which are major Russian gas importers by exploiting the response of the different commodities to a gas shock through a Bayesian vector autoregressive (VAR) model. As a result, including a lower gas price cap smooths the impact of a gas shock on electricity prices, while not considering a price cap will increase exponentially this impact.
    Keywords: Bayesian time series, Forecasted error variance decomposition, Gas price cap, Impulse response function, Mixture representation
    JEL: C11 C32 Q41 Q43
    Date: 2023–10
  5. By: Shapor, Maria (Шапор, Мария) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: As part of the presented literature review, foreign and Russian experience in using microeconomic data to model the household consumption function using various types of models for the US, EU and Russia, based on the respective types of panel data: PSID, ECHP and RLMS, respectively, is considered. The construction of such models is necessary for the state in connection with the need to achieve a rational level of differentiation of incomes and consumption of the population. Thus, the purpose of the presented work is to analyze the approaches used to assess the level of income of the population based on the use of panel microeconomic data for the US, EU and Russia.
    Keywords: Panel Study of Income Dynamics, USA, EU, Russia, SRC, SEO
    Date: 2023–01–09
  6. By: Nikulin, Alexander (Никулин, Александр) (The Russian Presidential Academy of National Economy and Public Administration); Kurakin, Alexander (Куракин, Александр) (The Russian Presidential Academy of National Economy and Public Administration); Trotsuk, Irina (Троцук, Ирина) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The relevance of the food superpower study is determined not only by the scientific interest of agrarian economics, sociology or history, but, primarily, by the tasks of agricultural policy, by the need in strategic and practical decisions of the subjects of public administration. The study aims at a comparative analysis of the food development strategies of Russia and the United States in the historical and contemporary perspectives. The subject is food-development and food-security strategies applied by Russia and the USA. Interdisciplinary and comparative methods are used to identify the key features of the food and agro-industrial development in two countries. Based on the results, the study presents not only environmental or technological factors in the formation of the agrarian strategies of the USA and the USSR, but also political and economic factors (American depression and Soviet collectivization; NeoNEP in the USSR and the New Deal in the USA). The paper concludes with a set of variables for the study of strategies for becoming a food superpower and for keeping this status: at the stage of becoming a food superpower – state policy to support agriculture, introduction of new technologies and methods of farming, development of consulting services, agricultural cooperation, wholesale markets and supply chains, social development of the village and information infrastructure, integration with world markets and expansion of food trade; at the stage of keeping and strengthening the status – the use of the newest technologies and agricultural practices, effective consulting services, expanding links with retail markets and international food trade, regional climate resilience. The novelty of the study is determined by the attempt to model a path for becoming a food superpower based on the comparative analysis of the US and Russia food strategies, and by testing of the hypothesis that there are two stages in the evolution of a food superpower. Based on the study of the real global leadership of Russia and the United States as wheat exporting countries and of the planned development of organic food production, the paper provides some recommendations on the possible ways for combining these two strategies and overcoming their limitations.
    Keywords: food security, food superpower, agriculture, agricultural production, economic strategy, food development strategy, Russia, USA
    Date: 2022
  7. By: Do, Hung Xuan (School of Economics and Finance, Massey University); Nepal, Rabindra (Faculty of Business and Law, University of Wollongong); Pham, Son Duy (Finance, University of Aberdeen Business School); Jamasb, Tooraj (Department of Economics, Copenhagen Business School)
    Abstract: Despite the massive impacts of the COVID-19 pandemic and the Russia-Ukraine war on the European energy market, little is known about their effects on the transmission of risks between member states’ electricity markets and key electricity sources. In this paper, we first employ the quantile connectedness approach to quantify the return connectedness between eleven European electricity markets, natural gas, and carbon market, then examine the impacts of the two crises on the interconnectedness. We find a significant return interconnectedness of the system, mainly driven by the spillover effects among European electricity markets. An investigation of the connectedness across quantiles shows that the spillover effects are much stronger at the tails of conditional distribution and the natural gas and carbon markets are net recipients of return shocks across quantiles. More importantly, our results reveal opposite effects of the two crises on interconnectedness. While the COVID-19 pandemic reduces the interconnectedness, the Russia-Ukraine war intensifies the return shock transmission.
    Keywords: Natural gas; European Emission Allowance; Electricity markets; COVID-19; Russia-Ukraine war; Quantile connectedness
    JEL: D04 L94 Q43
    Date: 2023–06–02
  8. By: Firanchuk, Alexander (Фиранчук, Александр) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: The aim of the work is an empirical analysis of the ruble exchange rate pass-through into prices under reorientation of imports to suppliers from neutral countries due to the withdrawal of some suppliers from the Russian market. The motivation is related to the structural transformation of Russian foreign trade and the continued volatility of the ruble exchange rate. I collected a database of Russian imports based on statistics of the main trading partners. The data shows three periods since February 2022: a drop of import flows from all countries in February-April 2022; a period of reorientation (increase) of imports from neutral countries in May – December; and following general stabilization of trade. The result of econometric analysis at commodity-group level consistent with the hypothesis of reorientation of imports: the average growth rates of import prices from "unfriendly" countries during the considered period significantly exceed the rate of price growth in the pre-crisis period. The difference is from 1.9 to 4.9 percentage points in a year basis. At the same time, there is no evidence in favor of the hypothesis of an increase in the growth rate of import prices from neutral countries during the crisis period. The main conclusion is that, by the end of 2022, the ruble exchange rate pass-through into import prices returned to the characteristic values of previous periods. This suggests that the current weakening of the ruble will affect import prices and lead to a reduction of imports volumes. The period of turbulence and reorientation of Russian imports has ended. Its result was a multiple drop in imports from "unfriendly" countries and a higher increase in the prices of imports from them.
    Keywords: imports, prices, exchange rates, reorientation of imports, strategic competition, international trade
    JEL: L23 F14
    Date: 2023–10–24
  9. By: Mr. Jorge A Alvarez; Mehdi Benatiya Andaloussi; Chiara Maggi; Alexandre Sollaci; Martin Stuermer; Petia Topalova
    Abstract: This paper studies the economic impact of fragmentation of commodity trade. We assemble a novel dataset of production and bilateral trade flows of the 48 most important energy, mineral and agricultural commodities. We develop a partial equilibrium framework to assess which commodity markets are most vulnerable in the event of trade disruptions and the economic risks that they pose. We find that commodity trade fragmentation – which has accelerated since Russia’s invasion of Ukraine – could cause large price changes and price volatility for many commodities. Mineral markets critical for the clean energy transition and selected agricultural commodity markets appear among the most vulnerable in the hypothetical segmentation of the world into two geopolitical blocs examined in the paper. Trade disruptions result in heterogeneous impacts on economic surplus across countries. However, due to offsetting effects across commodity producing and consuming countries, surplus losses appear modest at the global level.
    Keywords: Commodities; international trade; sanctions; spillovers; prices; geoeconomic fragmentation; trade disruption; price change; commodity producer; net-commodity-importing country; trade fragmentation; Commodity markets; Commodity price fluctuations; Agricultural commodities; Inflation; Global
    Date: 2023–10–03
  10. By: Andrii Shcherbyna; Vsevolod Nikolaiev
    Abstract: The problem of principal impossibility to satisfy the housing needs of all citizens according to Constitution of Ukraine, subsequent housing property laws and other documents on housing management - was never articulated properly in scientific literature and remains still unsolved. The technical and economic problems of continues improper upkeep of existing buildings, reducing their service life, are also understudied. Ideas of new approach to housing policy firstly appeared in our recent publications. Unlike other researchers, we criticized condominium model, pointing out also on the wrong social policy, imperfect ownership regulations and the need of their scientific rethinking, poor condition of buildings and uncertain cost of its repair, tenant’s insolvency and budget limitations. All authors pointed out on the necessity to transfer poor residential real estate to efficient public or private owners. The history demonstrates that private ownership could play only limited role in housing provision, especially while economic depression or after the war. On the other hand, the value of existing housing property should be taken into account as the household means of payment. In our opinion, in the framework of liberal policy, any external expenses on housing and utility services as well as on capital repair of buildings should be exchanged for the share in property. The challenge appears: how to convert the future state subsidies into renovated public housing? Does the existing Ukrainian form of condominium let us to realize this task? Under conditions of insolvency of apartment owners in the worn-out of destroyed buildings, neither contributions nor loans could be possible, and mass budget subsidies, as we have showed, are socially unfair. Thus, the classic dualistic models could not help. The transition to the unitary model has the same obstacles. Only the corporative model allows to transform the shares of insolvent owner into funds to pay for the building maintenance and operation of dwelling, or, on the contrary, to transmit the ownership to investor who can bear appropriate responsibility. The last case need improvement of Finnish model. Of course, staying in a sort of shared property apartment means partly renting it using the same financial mechanism. Thus, residential property ownership in the legal form of a housing company will also make possible to obtain company’s ownership of a land plot, to register through the corporation the ownership on real estate with a land plot, to clearly define the shares and their value (instead of joint undivided ownership); to simplify these operations by treating shares as movable intangible assets (tokens). There are some additional advantages of corporative house ownership, like direct investments in the development project or company, life-cycle cost control as well as market value depending on the building condition. It could be easier to realize the reconstruction projects. In actual situation with thousands of demolished houses in Ukrainian cities, the housing policy must take into account the combination of existed property and new public or private investments in restoration. In the future, it would be possible also to carry out digital transactions with part of shares divided by tokens treating shares as intangible assets. The proposed model and tools will supplement the existing housing system and could be introduced both in houses under construction and under operation.
    Keywords: Model; Ownership; Restoration; Transformation
    JEL: R3
    Date: 2023–01–01
  11. By: Gayane Baghumyan
    Abstract: Understanding what drives discriminatory behavior is important in order to identify the best strategy to combat it. In this study, I exogenously manipulate participants’ beliefs about the origins of sexual orientation by providing evidence that supports biological causes of homosexuality. I employ money allocation tasks to measure discrimination. This allows me to causally identify the impact of information on discriminatory behavior. I first document the prevalence of discrimination against individuals with same-sex partners in Russia. On average, roughly 54% of participants exhibit discriminatory behavior against profiles with same-sex partners by allocating 16 percentage points less money to them. Further, the results suggest that exposure to evidence on the biological causes of homosexuality negatively affects discriminatory behavior. Participants in the treatment group allocate less money to profiles with same-sex partners, relative to participants in the baseline group. Potential rationales for this behavior could include the following: (i) the provision of information that contradicts existing beliefs might cause cognitive dissonance, triggering irritation and intensifying discriminatory tendencies; (ii) the information might foster beliefs that individuals in same-sex partnerships are fundamentally ’other’ - even at a biological level - thereby widening the perceived social gap between participants and these sexual minority groups and fostering discrimination further.
    Keywords: discrimination, information, sexual minorities, online experiment
    JEL: C99 D83 D91 J15 J71
    Date: 2023–08
  12. By: Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Gabriele Pellegrino (Catholic University of Milan)
    Abstract: This paper assesses the extent to which the international migration of inventors affects innovation in the receiving country. Drawing on a novel database that maps the migratory patterns of inventors, we exploit the end of the Soviet Union and the consequent post-1992 influx of ex-Soviet inventors to the United States. Econometric analysis on a panel of U.S. cities and technological fields shows that the patenting activity of U.S. inventors increased significantly after the arrival of ex-Soviet Union inventors.
    Keywords: geographic mobility; innovation; inventors; patents
    JEL: O31 O34 O51 J61
    Date: 2023–10

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