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2018, Issue 4 (40). Abstracts
Urban Costs and their Role in a Central Places Theory a lá Christaller–Lösch One of the most striking feature of the spatial economy is that cities form a hierarchical system exhibiting some regularity in terms of their size and the Public goods they supply. In order to show how such a hierarchical system may emerge, we consider a spatial economy model with monopolistic competitive markets for the multiple industrial sectors. As transport costs of trade assumed to be negligible, the key role in the urban system formation plays urban costs, which are the sum of a housing expenditures (e.g., rent) and commuting costs of worker’s transporting from home to the job place. Unlike the product transport costs, these ones are significant for the large cities, impeding to their unbounded growth and playing the role of dispersion forces. Agglomeration effect, in turn, is based on the local non-tradable public goods, which attract the people from settlemens of the lower rank. It is shown that this model generates the unique equilibrium outcome, which demonstrate the real urban hierarchic structures’ features. Key words: public goods, central places, urban cost, urban hierarchy, monopolistic competition
A Division of Society into the Rich and the Poor: Some Approaches to Modeling In recent years, economists have shown an increasing interest in the distribution of income and wealth within a society. In particular, this is manifested in the popularity of the Thomas Piketty’s book "Capital in the Twenty-First Century". Recent empirical evidence shows that in many different countries the gap between rich and poor is growing. Thus theoretical economists face a number of important questions. Where does economic inequality come from? How does inequality depend on economic growth? And vice versa, how does inequality affect economic dynamics? In this paper we provide a survey of some theoretical growth models which study income and wealth distribution in a market economy. These models suggest that in the long run the population inevitably splits into two unequal classes. Some consumers accumulate wealth and eventually own the whole capital stock in the economy, while the others draw down their wealth for current consumption. It can be argued that the division into the rich and the poor is, in a sense, an immanent property of a market economy. Key words: economic growth, inequality, income and wealth distribution, time preference
Stabilization Properties of Federal Fiscal Transfers to Russian Regions The article investigates the stabilization properties of federal financial assistance to the regions of the Russian Federation. According to the review of foreign empirical studies, key problems of the econometric estimation of intergovernmental transfers’ stabilization properties have been identified. The main econometric approaches to the analysis of the stabilization effect using panel and cross-sectional data are presented and interpreted. As a result of the implementation of econometric calculations to stabilization properties of the system of distribution federal financial assistance to subnational budgets for the period 2001—2015, the authors conclude that there is an effect of partial stabilization of regional budgets tax revenues by the federal center. Nevertheless, the obtained results indicate the heterogeneity of the revealed relationships, both for groups of regions classified by the level of fiscal capacity, and for individual sub-periods before and after the global financial crisis. Thus, the average stabilization effect takes place only after the global financial crisis and only for regions with an average level of fiscal capacity, whereas for poor and rich regions this effect is not significant. The estimates also showed that in the pre-crisis period, the federal center was guided not only by the dynamics of regional revenues, but also by its ability to provide transfers due to general economic growth and dynamics of world oil prices. Key words: intergovernmental transfers, tax revenues, stabilization properties, fiscal capacity, regions of Russia
S.P. Zemtsov, Russian Presidential Academy of National Economy and Public Administration, Moscow, Russia Factors of Regional Development in Russia: Geography, Human Capital and Regional Policies The Russian regions vary significantly in terms of the level and dynamics of social and economic development, which is primarily due to differences in the availability of natural resources. However, a number of regions managed to improve their position relative to the others since 1998, without hydrocarbon reserves: Leningrad, Kaliningrad, Belgorod, Tambov, Kaluga, Rostov regions, etc. The purpose is to identify and summarize the factors of regional development in Russia in 1998—2014, based on the analysis of successful examples and econometric methods. The first nature factors (favourable geographical position, availability of raw materials and agro-climatic conditions) determine development but to realize its potential regional authorities reduced investment risks and used human capital. Since 1998—2004, in addition to the raw materials extracting centres, the regions that actively attracted investments by using the benefi ts of a large market and remaining production assets (Moscow, St. Petersburg, Leningrad, Omsk, Tomsk, Novosibirsk and Khabarovsk regions) were in the lead. In 2005—2008 a number of successful regions (Moscow, St. Petersburg, Tatarstan, Sverdlovsk, Rostov, Novosibirsk, Perm regions) use human capital and technologies of large cities to develop knowledge-intensive services, and attract investors by reducing risks for business (Leningrad, Kaliningrad, Kaluga regions). In the post-crisis period 2009—2014, advantage was given to diversi- fi ed regions with developed agro-industrial complex (Belgorod, Voronezh, Tambov regions), processing industries (Sverdlovsk, Perm, Krasnoyarsk regions), with good institutional conditions (St. Petersburg, Kaluga, Samara regions, Tatarstan). We used the results to propose some recommendations for the regional policy: development of infrastructure, reduction of investment barriers, preservation and attraction of human capital to large cities. Key words: Russian regions, economic-geographical position, market access, entrepreneurial activity, investment risks, agglomeration economies, technological development, innovations, best practices
S.R. Moiseev, The Central Bank of Russia, Moscow, Russia The Independence of Central Bank: Concept, Methods and Impact of Global Financial Crisis The theory of independence of central banks was developed during the 1980s and 1990s. Central banks went from private joint-stock company to public entity with special legal status in the long-term. Today the topic of independence is one of the most popular in the political economy. In the 2010s, researches moved in two directions: the impact of independence on sovereign debt management and the role of democratic regimes. The disinflationary effects of independence are confirmed; moreover, independence minimizes the impact of the political cycle on inflation. Under the super-authoritarian political regimes such effects are not observed. The recent financial crisis 2007—2009 has changed the role of central banks as a result of non-conventional monetary and macro-prudential policy measures. The independence of the central bank was influenced by a complex of problems of the financial and fiscal systems. Recent research doesn’t suggest that independence of central bank has been reduced. However the recent financial crisis shed light on shortcomings of central banks independence theory. It includes departure from the political independence, overlapping of functions and defects of legal independence indexes. Today the theory is facing the task of rethinking the factors of independence and developing new methods for its estimate, taking into account the expanded powers of central banks. Key words: central bank, central bank independence, fiscal dominance, monetary policy
E.E. Grishina, Institute for Social Analysis and Forecasting at RANEPA, Moscow, Russia Minimum Wage as a Tool to Reduce Poverty: Expected Consequences of the Reform Consistent growth of the minimum wage is one of the important issues in recent Russian legislation. In May 2018 the minimum wage was increased up to the value of the subsistence minimum. In this paper we estimate the expected impact of the growth of the minimum wage on poverty, not taking into account possible negative effect on employment. According to the results obtained, even a significant increase in minimum wages will not lead to a noticeable poverty reduction. The main reason lies in the differences between the concepts of poverty, defined at the household level, and low wages, determined individually. If the minimum wage grows to the subsistence minimum, only a little more than a quarter of all additional payments will go to poor households. At the same time, almost half of the benefi ciaries of the growth of the minimum wage live in formally non-poor families with incomes that slightly exceed the poverty line. A greater impact on poverty can be achieved by determining the minimum wage on the basis of regional subsistence minimum values. However the main emphasis in overcoming poverty should be made on targeted programs, in which assistance is provided taking into account household incomes rather than individual incomes of workers, as in the case of minimum wage increase. Key words: minimum wage, poverty, subsistence minimum, microsimulations, impact assessment
V.I. Ageev, Faculty of Economics, Lomonosov Moscow State University, Moscow, Russia Comparative Analysis of Costs and Economic Effects of the FIFA World Cups (1998—2018) The article analyzes the costs of the organizers of the FIFA Football World Cups (1998— 2018), the economic impact of the event and the impact on the socio-economic sphere of the country after the tournament. A comparative analysis of the organizers cost categories in dynamics allows tracing the logic of the tournament holder (FIFA) approaches to the choice of the organizing country for the 2022 and 2026 tournaments. Estimates of the aggregate World Cup organization economic impact are based on the special multipliers. The Brazilian and Russian World Cups economic efficiency final results indicate a change in the tendencies of the organizers public spending on sports and other infrastructure in recent years. Improving the image of the organizing country in the world, inspiration and hospitality of the population in relation to guests, sports tourism development are the most important results and the basis for the tournament sporting heritage. A forecast regarding the costs of organizing the World Cups in Qatar–2022 and the USA, Canada and Mexico–2026 are made in this article. Climate conditions in Qatar will require new technological solutions and associated costs. The increase in the countries participating in the final stage of the World Cup 2026 in North America from 32 to 48 will be accompanied by an increase in the number of matches from 64 to 80 and an increase in the cost of organizing competitions, logistics and hospitality. Key words: FIFA World Cup, economic effect, sports infrastructure, organization costs
Decision-Making in International Sports Organizations — a Survey This paper surveys the literature on decision-making in international sports organizations. The International Olympic Committee, the Fédération Internationale de Football Association and many other federations delegate decision-making to internal committees. A complicated structure of those committees that reflects the international status of federations, a unique type of decisions that is inherent to sports industry, and specifi c decision-making mechanisms attract the researchers’ attention. The survey is comprised of four paragraphs. The first paragraph briefly reviews papers aimed at studying preferences of the international sports federations committee members. The second paragraph is devoted to papers that analyze determinants of success of bids for hosting sporting mega-events. In the third paragraph we discuss different ways to fight corruption in decision-making bodies of international sports federations. Finally, we touch on the problem of accountability in international sports federations. The focus of the paper is on the economics literature, and it is not aimed to discuss a wide literature on such topics as management of sport organizations or psychology of decision-making. Key words: sport, international organizations, decision-making, voting, corruption, FIFA
Analysis of Factors Influencing the Pricing of Transfers in European Professional Football In this study, econometric model of the transfer value of a professional football player is being developed, based on reputational factors. The relevance of the chosen topic for scientific research is illustrated both by a number of economic indicators and previous works on the topic of recent years: there is an increase in the volume of football transfer market both in Europe and around the world, while there is a lack of effective pricing models for the transfer value, including predictions of the potential incomes and outcomes of clubs. The economic principles of the clubs’ contractual interactions in this context are built around the skills and personal qualities of professional players as holders of a specific intangible asset. The economic essence of the transfer activity of professional football clubs in Europe is studied: they sign contracts with the players, during the period of which the club has the right to require a compensation for the transferring of its players to other teams. Taking into account the reputational prerequisites reflecting the specifics of decision-making by the parties of potential transfer transactions, a range of factors are determined to test the research hypothesis and to include statistically significant variables in the econometric model of the transfer value. Key words: professional football, sport industry, transfer pricing model, sports finance, sports economics
N.A. Osokin, Center of Sectoral Research and Consulting, Financial University under the Government of the Russian Federation, Moscow, Russia The Socio-Economic Importance of Grassroots Football in Russia: Possibilities for Research The article discusses the prospects of grassroots football development in Russia and the potential socio-economic areas that can be positively influenced by this factor. This study also provides and overview of the current financing system of Russian non-elite football as well as the long-term development goals set out in the 2030 Russian Football Development Strategy. The authors conduct a thorough review of scientific literature. Namely, the concept of social return on investment is discussed due its broad application in a number of empirical studies. Specific attention is given to research papers that analyzed the cause-effect relationships between sport and physical activity and healthcare, education, social inclusion and economic factors. In conclusion the authors summarize the main findings of previous studies and ascertain the feasibility of conducting similar research in the context of Russian football. Data accessibility and validity are highlighted among the potential barriers for conducting such a study. This sort of research could have high practical relevance due to the proactive initiatives undertaken by state agencies and the Football union of Russia in promoting grassroots football activates across the country. Key words: sports economics, grassroots sport, grassroots football, SROI, social responsibility, Strategy 2030
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