nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒05‒30
seven papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Ukraine Invasion and Votes in favour of Russia in the UN General Assembly By Mohammad Reza Farzanegan; Hassan F. Gholipour
  2. Made in Russia? Assessing Russia's potential for import substitution By Simola, Heli
  3. Failure of Gold, Bitcoin and Ethereum as safe havens during the Ukraine-Russia war By Alhonita Yatie
  4. The Ukraine Support Tracker: Which countries help Ukraine and how? By Antezza, Arianna; Frank, André; Frank, Pascal; Franz, Lukas; Rebinskaya, Ekaterina; Trebesch, Christoph
  5. Who supports war for justice and why? Evidence from Russia and Ukraine By Mohammad Reza Farzanegan; Sven Fischer
  6. Resolution and Depositors' Trust: An Empirical Analysis of Three Resolution Cases in Poland By Malgorzata Iwanicz-Drozdowska; Å ukasz Kurowski; Bartosz Witkowski
  7. The Relationship between Inflation, Interest Rate, Unemployment and Economic Growth By Vîntu, Denis

  1. By: Mohammad Reza Farzanegan (University of Marburg); Hassan F. Gholipour (Western Sydney University)
    Abstract: Why did some countries vote not to condemn Russia’s invasion of Ukraine at the United National General Assembly’s first emergency session since 1997? Our study examines different economic, political, geographic and historical reasons behind the voting behaviour of several countries in favour of Russia. Probit regressions show that higher dependence on military exports from Russia, years ruled by leftists, access to Russian markets for exports, being a major recipient of Russian aid, being former members of Soviet Union and sharing borders with Russia are positively associated with the probability of voting in favour of Russia. Factors which reduce the probability of support for Russia over the Ukraine invasion are higher levels of civil and political freedom within a country and percentage of exports from Russia to partners in total Russia exports.
    Date: 2022
  2. By: Simola, Heli
    Abstract: Russia's brutal military aggression on Ukraine has led to extensive economic sanctions by Western countries and the withdrawal of many foreign companies from Russian markets. The isolation of Russia from the international community has substantially restricted its access to advanced technologies and eroded the country's economic growth potential. Our analysis suggests that Russia has fairly limited possibilities for import substitution in high-technology sectors. China, which could play a key role as an alternative source for inputs, has seen its share of Russian imports, including high-tech inputs, increase substantially in recent years. The extent to which China is willing to support Russia in the current situation remains unclear, however.
    Keywords: Russia,trade,sanctions,import substitution
    Date: 2022
  3. By: Alhonita Yatie (BSE - Bordeaux Sciences Economiques - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper studies the impact of fear, uncertainty and market volatility caused by the Ukraine-Russia war on crypto-assets returns (Bitcoin and Ethereum) and Gold returns. We use the searches on Wikipedia trends as proxies of uncertainty and fear and two volatility indices: S&P500 VIX and the Russian VIX (RVIX). The results show that Bitcoin, Ethereum and Gold failed as safe havens during this war.
    Keywords: War,Russia,Ukraine,crypto-assets,Gold,Safe haven
    Date: 2022–03–30
  4. By: Antezza, Arianna; Frank, André; Frank, Pascal; Franz, Lukas; Rebinskaya, Ekaterina; Trebesch, Christoph
    Abstract: This paper presents the 'Ukraine Support Tracker', which lists and quantifies military, financial and humanitarian aid to Ukraine in the context of the Russia-Ukraine war. This second version covers the period January 24 until April 23, 2022. We measure support from Western governments, namely by the G7 and European Union member countries. Private donations, help for refugees outside of Ukraine, or aid through non-governmental organizations are not included due to a lack of systematic data. To value in-kind support like military equipment or weapons, we rely on government statements as well as own calculations using market prices. We find significant differences in the scale of support across countries, both in absolute terms and as percent of donor country GDP. In billions of Euros, by far the largest bilateral supporter of Ukraine is the United States, followed by Poland, the United Kingdom, Canada and Germany. In percent of donor GDP, small Eastern European countries stand out as particularly generous.
    Keywords: International aid,military aid,war,geoeconomics
    JEL: F35 F51 H56 H63 H84 H81
    Date: 2022
  5. By: Mohammad Reza Farzanegan (University of Marburg); Sven Fischer (University of Marburg)
    Abstract: We study the acceptability of war as a necessary tool to obtain justice under certain conditions across individuals from Russia and Ukraine in 2011. We discuss which socio-economic, political and individual characteristics shape the support for using destructive military force to achieve justice. Overall, the acceptance of war for justice is relatively low in both countries. Using logistic regressions, we found that there are characteristics that significantly reduce the support for war for justice in both countries, such as gender and level of happiness. Support in both countries is also significantly larger among respondents who are interested in politics and are married. Additionally, there are conditions which produce different results between the countries, such as religiosity, country aims, employment, confidence in the government, concern over possible war and political orientation.
    Date: 2022
  6. By: Malgorzata Iwanicz-Drozdowska (SGH-Warsaw School of Economics, Poland); Å ukasz Kurowski (SGH-Warsaw School of Economics, Poland); Bartosz Witkowski (SGH-Warsaw School of Economics, Poland)
    Abstract: This paper aims to evaluate the role of depositor-specific features in the behaviour of depositors in bank resolution processes. The study is based on a telephone interview conducted with 1,000 Poles, including customers of banks that have undergone resolution in recent years and basic statistics of resolved banks. We empirically verified which factors were significant for the decision on deposit non-withdrawal, which helps to avoid bank runs. Our findings indicate that trust in public institutions and the experience gained with age play a key role in overall depositors’ behaviour. However, for resolutions, declared trust is replaced by objective, case specific trust based on information about the resolution process and its consequences.
    Keywords: deposit insurance, bank resolution
    JEL: G21 G33
    Date: 2022–02
  7. By: Vîntu, Denis
    Abstract: This paper presents a quarterly structural macroeconomic model for the Republic of Moldova, which is known as the macroeconomic data model (MDM). This model can be used to assess economic conditions in the Republic of Moldova, forecast the macro economy, analyze policy options, and deepen our understanding of the functioning of a market economy. Some of the key features of the model are highlighted. First, the report looks at the Moldovan economy as a whole and finds that it is a small and open economy. Second, the model is small enough to be manageable for forecasting and simulation exercises, but still has enough detail for most purposes. Third, the model is designed to have a stable equilibrium over a long period of time, in accordance with classical economic theory, while its short-run dynamics are demand-driven. Fourth, the current version of MDM is mostly backward-looking, i.e. Expectations are influenced by the inclusion of lagged variables. The MDM uses a quarterly frequency data set, which allows for a more detailed analysis of the dynamics. The data is mostly estimated based on historical information. The paper includes stochastic long-run simulation results. The relationship between inflation, interest rates, unemployment and economic growth is important.
    Keywords: Republic of Moldova, macroeconometric modelling, open and small economy, inflation, interest rate, unemployment, economic growth, classical economics, Keynesian economics.
    JEL: C13 E21 E30 E41 E44
    Date: 2022–03

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