Switch to Russian

2022, Issue 3 (55). Abstracts



S. A. Smolyak
, Central Economics and Mathematics Institute, Russian Academy of Sciences, Moscow, Russia

New method of liquidation value estimation

Valuation standards define the liquidation value of an asset as its value within a shortened (as compared to typical) exposure / sale period. However, usually such timings (even when assets are sold at the market value) are random, and the "more" / "less" ratios are not applicable. We treat the liquidation value of an asset as its value in a forced sale with proper marketing and a deterministic exposure period limit. We propose a model for determining the liquidation value, which allows to optimize the seller’s marketing policy according to the criterion of the expected discounted benefits. This model takes into account the probabilistic nature of demand for the similar assets and the dependence of this demand on price (information on the price elasticity of demand is not required). The formulas obtained also allow taking into account inflation, the salvage value of an asset, its depreciation during the exposure period, as well as the need to incur selling expenses during the exposure period and the possibility of obtaining additional income from the use of the asset in this period. The dependences of the asset’s liquidation value on the remaining exposure period, calculated using the model, differ significantly from those recommended in the literature on valuation.

Key words: liquidation value, exposure period, probability of sale, price elasticity of demand, expected benefi ts of the seller, infl ation, depreciation, selling costs
JEL classification: D46, M41, D32, D81, E31, M31



A. I. Votinov, Financial Research Institute, Ministry of Finance of the Russian Federation; National Research University “Higher School of Economics”, Moscow, Russia

The effects of additional non-stationary processes on the properties of DSGE-models

DSGE models are based on the trend-cycle decomposition. The standard approach implies an out-of-model decomposition of the data, in which the trend component is discarded, and the parameters of the model are estimated on the cyclic one. This approach can lead to the loss of statistical information and reduce the quality of the model, which is crucial for practical purposes. The study suggests adding several sector-specific exogenous non-stationary processes to the model, which complement the standard DSGE model. The in-model detrending is described, and an approach to GMM-estimation of the non-stationary processes’ parameters is proposed. Several results are obtained. First, the inclusion of such non-stationary processes in the model increases the marginal density and improves the accuracy of forecasting within the sample. This result is robust to the inclusion of measurement errors in the model. Secondly, it is shown that the addition of exogenous trends allows obtaining a more plausible decomposition of data into a trend and a cycle. Finally, the use of the GMM approach to estimating the trends’ parameters makes possible to increase the marginal density. The results obtained in the paper can be used to create practice-oriented DSGE models.

Key words: DSGE, parameters estimation, stochastic processes, trend
JEL classification: C65


 

E. P. Dobronravova, Russian Presidential Academy of National Economy and Public Administration (RANEPA); Institute of Applied Economic Research; Lomonosov Moscow State University, Moscow, Russia

Industry effects of monetary policy in Russia: Econometric analysis

This paper presents the econometric analysis of the heterogenous effects of monetary policy on industrial output and producer prices in manufacturing sector in Russia. The estimation of the differences in the impulce responses to the interest rate shock is conducted using structural VAR-models, the analysis of key industrial characteristics, explaining differences through monetary transmission channes, is based on principal components and correlations. Our findings reveal the strongest response to monetary policy in such industries as manufacture of rubber and plastic products, manufacture of non-metallic mineral products, manufacture of pulp and paper, manufacture of machinery nd equipment, manufacture of electrical, electronic and optical equipment and manufacture of motor vehicles and equipment. Besides, in these industries the response is usually deffered to 2–3 months after the shock. Our findings also show that the impact of monetary shocks on output is particulary strong in industries producing capital goods and supplies for construction but particularly weak in industries with high concentration and high profits. That means that differences in industrial responses to monetary policy can be described by two key channels of monetary transmission — interest rate channel (due to high demand sensitivity to interest rate changes) and bank lending channel (due to important role of bank loans in firms’ financing).

Key words: monetary policy, monetary transmission, industry effects, manufacturing industries
JEL classification: E52, E32, C22, L60


 

D. A. Orlov, Monetary Policy Department, Bank of Russia, Moscow, Russia
E. A. Postnikov, Chelyabinsk Division, Ural Main Branch, Bank of Russia, Chelyabinsk, Russia

Phillips curve: Inflation and NAIRU in the Russian regions

Price stability is one of the strategic goals of the monetary policy of the Bank of Russia. A significant factor of inflationary pressure on the economy is short-term deviations of the unemployment rate from NAIRU. At the same time, the relationship between the labor market and inflationary processes at the regional level may differ signifi cantly. This paper examines regional heterogeneity in the Russian labor market in the form of a Phillips curve. An important feature for choosing the main research method is the lack of statistical information about NAIRU. Based on the models of unobservable components using the Kalman filter, the influence of the unemployment gap on inflation in each region of the Russian Federation is estimated. The constructed models take into account the impact on inflation of the main premises of the theory of rational expectations, supply shocks and inflation lags. Conclusions were drawn that there is a significant relationship between the unemployment gap and inflation for most of the Russian regions, while the sensitivity of inflation to changes in the labor market in the country as a whole is rather weak. Regions with proinfl ationary and disinfl ationary influence from the labor market were identified.

Key words: Russian labor market, regional heterogeneity, NAIRU, unemployment gap, infl ationary pressure, unobservable component models, Kalman filter
JEL classification: C32, C38, E24, E31


 

I. E. Kalabikhina, Lomonosov Moscow State University, Moscow, Russia
Z. G. Kazbekova, Lomonosov Moscow State University, Moscow, Russia

The impact of the first demographic dividend on economic growth considering human capital

Given the modest growth rates of the Russian economy over the past 10 years and population aging, a careful study of the demographic component of economic growth is of particular interest. This article provides a quantitative assessment of the first demographic dividend in Russia in 1997–2017. Based on Rosstat data for 74 Russian regions, the growth rates of real GRP per capita are modeled depending on the share of the working age population. Additionally, the model includes the possibility of assessing the dynamics of economic growth at the expense of human capital, since its high level can compensate for the negative infl uence of the demographic factor. According to our calculations, the demographic factor is significant and in the 2000s, it contributed to economic growth; since 2010, Russia has received a negative demographic dividend. Human capital weakly compensates for the negative trends of the demographic factor, which in the coming years will serve as a serious challenge to the growth of the Russian economy. The revealed positive, although still weak, influence of human capital indicates that the development of human capital in the regions of Russia can become a driver of their development.

Key words: age structure, Russia, first demographic dividend, human capital, economic growth
JEL classification: E23, E24, J11, J21, J24


 

O.V. Dynnikova, International Monetary Fund, Washington DC, USA
Annette Kyobe, International Monetary Fund, Washington DC, USA
Slavi Slavov, International Monetary Fund, Washington DC, USA

Regional disparities and fiscal federalism in Russia

This paper examines how regional disparities have evolved in Russia and how Russia’s system of intergovernmental fiscal relations is managing these disparities. Regional disparities have fallen over the past two decades but remain relatively high. Socioeconomic outcomes remain worse in lagging regions despite faster growth and convergence in income levels. The twin shocks of COVID-19 and lower oil prices appear to have impacted richer regions disproportionately. Compared to other large countries with federal systems of government, Russia stands out with its high reliance on direct taxes as a revenue source for its regions. Russian policymakers have made efforts to reduce regional disparities by designing a federal transfer system that intends to close vertical imbalances, achieve redistribution, and insure regions against both common shocks (“stabilization”) and idiosyncratic ones (“risk-sharing”). Transfers from the federal budget to the regions provide some redistribution by reducing the dispersion in real per capita fiscal spending, but also tend to be associated with lower growth. The Russian fiscal system offers degrees of redistribution and risk sharing of around 26 and 18%, respectively — with in-kind social transfers contributing the most. Finally, federal transfers in the aggregate tend to be procyclical and are also fairly unresponsive to shocks to regions’ own revenues.

Key words: inequality, regional disparities, fi scal federalism, Russia
JEL classification: H7, R1



A. Yu. Kolpakov, Institute of Economic Forecasting, Russian Academy of Sciences, Moscow, Russia
A. A. Yantovskii, Institute of Economic Forecasting, Russian Academy of Sciences, Moscow, Russia
A. A. Galinger, Institute of Economic Forecasting, Russian Academy of Sciences, Moscow, Russia

Cost of achieving zero CO2 emissions by mid-century: Approach and estimation for the world largest economies

The article presents a methodological approach to assessing the cost of energy for the world economy in ambitious scenarios for reducing CO2 emissions associated with energy consumption. The approach takes into account that large-scale replacement of fossil fuels with electricity generated from renewable energy sources: a) should be accompanied by the grid development and the deployment of reserve storage capacities and hydrogen technologies; b) requires the use of mechanisms for projects payback, which are included in the final prices for electricity; c) will create the need to replace the shortfall in budget revenues from the production and consumption of hydrocarbon fuels. Forecast calculations show that the scenario of achieving zero emissions in the middle of the XXI century may turn out to be unstable, since it is characterized by increase in the cost of energy supply to the world economy by 40% compared to the current level, and the ratio of energy costs to GDP will exceed 13% in certain periods, and for some countries (including Russia) — 15%. For the global economy to remain within its solvency limits, hydrocarbons should play a decisive role in energy supply for another two decades, but the growth in energy demand can increasingly be met with the help of carbon-free solutions.

Key words: CO2, emissions, renewable energy, energy price, investments, Paris Agreement
JEL classification: O5, O13, O33, Q01, Q4


 

V. M. Ostapenko, St. Petersburg State University, St. Petersburg, Russia
E. A. Buglevsky, St. Petersburg State University, St. Petersburg, Russia

Money supply in the history of macroeconomic thought: 50 shades of endogeneity

The paper considers the evolution of the money supply concept in economics through the lens of contemporary discussion on the degree of its endogeneity. It is stated that the model of exogenous money supply formation, widespread in the literature and actively criticized in recent decades, is an artifact of macroeconomic thought. Its dominance lasted a very short time period, and various forms of endogeneity were attributed to money supply much more often in the course of monetary theory development. Authors cover the debates between the currency and banking school in the XIX century, the birth of the theory of money multiplier, Keynes’ position, the monetarist view of money supply and its criticism by Post-Keynesians. Particular attention is paid to the turn in views within the mainstream, from the Real Business Cycles doctrine to state-of-the-art models of the New Synthesis. It is emphasized that the complete exogeneity of money supply is a distinctive feature only of the monetarist approach, which has relied on the specific assumption of the stability of money demand function. The paper shows that, despite the visible convergence between the New Keynesian and Post-Keynesian positions, based on the modeling of interest rate targeting rather than money supply targeting by the central bank, fundamental differences still remain between two camps regarding the endogeneity mechanism.

Key words: money supply, monetary theory, endogenous money, money multiplier, Keynes, Post-Keynesian economics, monetarism, New Keynesian economics
JEL classification: B22, E40, E51, E58


 

A. Galeev, Centre for the History and Methodology of Economic Science HSE University, Moscow, Russia

Proto-marginalist approach in Russia: Yuli Zhukovsky’s interpretation of Ricardo

The paper focuses on the interpretation of David Ricardo’s theory of value and distribution suggested by Yuli Zhukovsky, a 19th century Russian economist. In his interpretation, Zhukovsky introduced a two-factor production model characterized by decreasing marginal productivity as well as supply-and-demand price mechanism. Zhukovsky’s interpretation of Ricardo was an attempt to deliver a more rigorous approach to the agrarian issue — the hot topic that marked the public debates in Russia after the abolition of serfdom in 1861. Zhukovsky, an early critic of Marx, outlined a different path in the reception of the classical approach in Russia that preceded later developments in mathematical economics. The paper introduces Zhukovsky’s interpretation as a case of proto-marginalist analysis. It also demonstrates that Zhukovsky treated the mathematical apparatus as an instrument for the practical application of political economy to the issue of economic development.

Key words: Russian economic thought, proto-marginalism, David Ricardo, Yuli Zhukovsky
JEL classification: B12, B16, B31


 

S. A. Afontsev, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Moscow, Russia

Political paradoxes of economic sanctions

The article addresses political economy aspects of the policy of economic sanctions. Given the fact that decisions taken both in sender and target countries depend on the interaction of numerous groups of political and economic agents, sanction research can be productive only if their behavior is explicitly modelled given their objective functions and institutional context they face. It is shown that political economy approach can help resolve a number of paradoxes common in sanction research, i. e., paradoxes related to inefficiency of sanctions, pro-conflict reaction on sanctions by target countries, escalation of inefficient sanctions by sender countries, and retaliatory measures. Analysis shows that escalation of economic sanctions against the Russian Federation can not shift country’s foreign policy in the direction preferred by sender countries. On the contrary, higher sanction costs for the Russian economy fuel domestic political support for current foreign policy decisions. Consequently, conflict resolution should rely upon multilateral political dialogue rather than economic sanctions.

Key words:  economic sanctions, political economy, Russia, economic interests, political interests, world politics
JEL classification: F51, P16, P26


 

I. N. Timofeev, MGIMO University at the Ministry of Foreign Affairs of Russia, Moscow, Russia

Policy of sanctions against Russia: Newest stage

Russia is facing significant rise of economic sanctions since the beginning of the military operation in Ukraine in February 2022. The list of restrictions includes fi nancial, trade, visa, transport and other types of sanctions. There are few precedents of similar scope of sanctions since at least the end of the Cold War. In recent 30 years there has been a transition from “economic carpet bombing” to “smart sanctions”. Sanctions against Russia after February 2022 seem to deviate from this trend. Such a deviation raises research questions about the ways of the “smart” sanctions combination with more comprehensive restrictions and about the evidence of a new paradigm of sanctions policy. Key assumption implies that these are the intensity and the scope of sanctions, rather than the change of the restrictions’ instruments which mark a new paradigm, provided by the Russian case. “Smart sanctions” remain a key instrument, however, their quality and quantity make them similar to the “economic carpet bombing”. The only meaningful obstacle for the initiators to abstain from a wider use of sanctions is a threat of a damage to their own economies. They have to use “smart sanctions” to avoid greater losses for themselves. The article relies on the analysis of key decisions on sanctions as well as their legal substance to test this assumption.

Key words:  economic sanctions, policy of sanctions, smart sanctions, Russia
JEL classification: Z18


 

O. V. Buklemishev, Lomonosov Moscow State University, Moscow, Russia

Financial sanctions and future of globalization

The dynamics of financial sanctions over the past decades is considered. The outstripping growth of the role of financial and other "smart" sanctions is explained by their painfulness for target states, organizations and citizens, the asymmetry of the impact and the possibility of minimizing damage to third parties. It is shown that although the heyday of fi nancial sanctions coincides with the period of the rollback of globalization, in many respects they are generated precisely by the process of globalization and the growth of network interactions. The assumption of the mutually reinforcing influence of deglobalization and sanctions is considered in view of the fact that the network effects of international financial institutions increase over time. Nevertheless, as a result of financial sanctions, the active processes of replacing traditional international payment and settlement mechanisms with alternative ones and the US dollar — with other reserve currencies (primarily the Chinese yuan) have not yet started. Historical experience confirms the conclusion that despite the negative effects of financial sanctions, in the modern world they may not contradict to the continuation of globalization.

Key words: sanctions, international relations, international payment systems, globalization, deglobalization, network effect, reserve currencies
JEL classification: F51, F33, F65


 

I. V. Danilin, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Moscow, Russia

From technological sanctions to Tech Wars: Impact of the U.S. — China conflict on sanctioning policies and the high-tech markets

The U. S. “Technology War” with intensive sanctions against Chinese digital sector marked changes in the American and global sanctioning policy. Historically, tech sanctions are well known practice, negatively affecting defense and total capacity of opponents/adversaries. But case of the “Tech War” is very specific: scale of sanctions was unexpected, as was the choice of highly internationalized digital sector as their target. Key groups of the U.S. tech sanctions since 2018 seem to fit existing practices — taking into account realities of the modern high-tech markets (for example, sanctions against Chinese venture investments in the U.S.A. or against Chinese startups). However, deeper analysis of the motives and content of the “Tech War” reveals changes in the ideology of the sanctioning policy. From blocking all forms of technology transfer in order to weaken the opponent (restrictionism) it is evolving toward strengthening U.S. leadership in high-tech markets through technological expansionism (blocking competition). This convergence of trade/investment national strategies with sanctioning policies is also determined by high-tech market specifics, as well as by features of the digital economy (i. e., access to the global raw data). Other nations are also considering these new practices which imply further increase of the technological component in the sanctioning policy (despite re-actualization of the hard power in international relations). At the same time, geopolitical factor also forces changes in the organization of high-tech markets — a challenge that will remain for the future.

Key words:  sanctions, high-technology markets, technology war, U.S.A., China
JEL classification: F51, F52, O38


 

D. I. Ushkalova, Institute of Economics, Russian Academy of Sciences, Moscow, Russia

Russia’s foreign trade under sanctions pressure

The article discusses the specifics of the development of Russia’s foreign trade in the new realities, formed, on the one hand, by the unprecedented sanctions regime against the Russian economy, and, on the other hand, by a sharp increase in prices on world commodity markets in the context of increased geopolitical uncertainty, which allows Russia to financially compensate for the decline in physical volumes of export deliveries. The nature of the sanctions imposed against Russia and their impact on the dynamics of its exports and imports and the conjuncture of world commodity markets are analyzed. The concept of "trap of a big country" is introduced in relation to anti-Russian sanctions. An assessment of the results of Russia’s foreign trade in January–May 2022 is given and brief proposals for improving of Russia’s foreign trade policy are made. The conclusion is made about the resistance of the cost volumes of Russian exports to sanctions pressure and the need for a foreign trade policy aimed at comprehensive support of imports necessary for the functioning of the domestic economy in the short term.

Key words:  anti-Russian sanctions, Russian foreign trade, world merchandise trade, global commodity markets, commodity prices, foreign trade policy
JEL classification: F01, F14, F13

 

N. V. Zubarevich, Lomonosov Moscow State University; Institute of Social Analysis and Forecasting, Russian Presidential Academy of National Economy and Public Administration, Moscow, Russia

Regions of Russia in the new economic realities

In the first three months of the sanctions’ crisis, regions connected with the global market were hit harder: these are the exporters of oil, gas, metals, and regions of the manufacturing industries with a high share of imported components. The influence of specialization has increased; in industry the decline is stronger in the regions of the automotive industry, oil and gas production, ferrous metallurgy. The decline in retail sales is stronger in the agglomerations of the largest cities due to the departure of foreign companies and in some regions with low incomes, where the population is faster reducing consumption. The decline or stagnation of personal income tax revenues in May 2022 manifested in the regions of the fuel complex, metallurgy, in some depressed regions and in underdeveloped Republics, where the share of shadow business may increase. The risks of part-time employment are higher in the industrial regions of the Center, the Volga district and part of the Urals. The employment reduction risks in the market services are higher in agglomerations and other major cities, in part of the depressed regions; in resort regions they are mitigated by increased home tourism. The risks of regional budgets tax revenues decline are strongest in more developed and export-oriented regions. The Southern agrarian regions and the Far East (with the exception of Sakhalin) are going through the crisis more mildly due to the home demand for food products and its exports, and for the Far Eastern regions — due to orientation to the Asian markets, especially China. Moscow is likely to go through a new crisis, like the two previous ones, softer than other regions, especially in terms of the dynamics of household incomes and the budget revenues.

Key words:  crisis, sanctions, development of Russian regions, economic specialization, regional labor markets, regional budgets
JEL classification: R12

 

V. E. Gimpelson, CLMS NRU HSE, Institute of Sociology of the Federal Centre of Theoretical and Applied Socilology of the Russian Academy of Sciences, Moscow, Russia

Russian human capital in times of sanctions and counter-sanctions: Some redistributive implications

The paper argues that the combination of sanctions, counter-sanctions and total importsubstitution taken together creates a strong shock on the human capital, and affects its utilization and reallocation. This effect can go along two major lines. First, one can expect underutilization of previously accumulated knowledge and skills due to the technologically regressive import-substitution. Second, those players who have previously lost in the global competition may take over the key role in formation and adjustment of the human capital to the changing demand. This shift in power and resources is likely to make the regress endogenous. These processes concern technological developments as well as R&D and higher education. As a result, one may expect that a significant part of the human capital that was created for utilization in more open and competitive environment can be lost.

Key words:  human capital, sanctions, counter-sanctions, redistributive implications
JEL classification: J24, O15, P16

 

V. M. Polterovich, Central Economics and Mathematics Institute, Russian Academy of Sciences; The Moscow School of Economics (MSE MSU), Moscow, Russia

Once again about where to go: Toward a development strategy in isolation from the West

It is shown that the program of institutional changes, outlined in a number of articles of the author, is even more relevant in the current context of sanctions and needs to be further elaborated. Due to restrictions on import and export flows, the need to form long chains of added value within the country is increasing. Business cannot cope with this task on its own. To solve it the institutions of catching-up development are needed, including the system of indicative planning headed by the general development agency and the national innovation system aimed at borrowing of technologies with a gradual increase of own innovative developments. It is advisable to conduct the reform of economic governance as a continuation of the reform of project activities carried out in 2018–2019. New institutions must ensure economic growth by forming a set of mega-projects and programs, coordinated with each other and with the budget, based on the coordination of efforts of the state, business and society at the federal, regional and municipal levels. The increased necessity of differentiated progressive income tax introduction is underlined. The expediency of forming consortiums, expanding the system of sector research institutes and increasing investment in education are noted.

Key words:  institutional reform, economic growth, value added chains, indicative planning, national innovation system, anti-inflationary policy
JEL classification: O21, P11, P21, I25





Back
New Economic Association

Contacts