Publications
The global economy passes the COVID-19 related crises. For various projections, the output fall in Russia in 2020 will vary from 2 to 8 percent. So, in comparison with the crises of 1998 and 2008, the current shock can be more severe. In the upcoming years the Russian economy will pass the recovery stage, approaching the new balanced growth path. What proximate sources would push this growth?
With the neoclassical industry growth accounting and the Russia KLEMS dataset the present report aims to shed light on this, considering the growth patterns and sources of growth after the crises of 1998 and 2008. The report unveils the most important sources of the after-2008 stagnation in Russia, which are the decreasing efficiency of the extended oil and gas sector and the suspension of technology convergence. Since the recovery in Russia will be, most probably, caused by the increasing demand on energy and raw materials, driven by the recovery of global markets, policy implications for Russia should include efforts to improve efficiency in such export-oriented sectors, as oil and gas, and efforts, which aim to boost technology convergence such as backing export-oriented firms, which have been integrated to global value chains.
The issues to be discussed at the panel included: can past experience of economy recovery following crises of 1998 and 2008 be helpful at present; what sectors were driving growth of the Russian economy in the last decade, and are they able to perform this role in the future; what growth rate is feasible in 2021; what amendments to the national projects aimed at boosting growth are likely. In addition to that the panel participants specified key factors affecting productivity and output trends in Russia, suggested ways to support economy in the course of “coronacrisis”, and pointed out to economic policy measures that could accelerate economic growth.
The article provides a brief overview of the background of constructing composite leading indicators (CLI) for Russia; the paper defines key indicators which currently are calculated and published monthly; they can be put in practice to monitor the Russian economy. The underlying methodological approaches are analyzed, along with their advantages and disadvantages. The importance of accounting for a factor of regular or irregular updates and revisions of methods for calculating the CLI is emphasized. Due to them not only the current but also the “historical” dynamics of the indices occasionally change. The paper compares various CLI components and reveals both similarities and differences in the notion of the cyclical dynamics of individual components, reaching the point that the same indicators depending on the methodology are considered as leading, or as lagging. A set of “core” indicators included in the calculation of almost all Russian CLIs is determined; the author also noted those indicators that are widely used in other countries but not yet in Russia, for various reasons.
Special attention is paid to the problems of dating economic cycle turning points, in particular, those arising from different notions of the very concept of the economic cycle. Dating using formal statistical methods, firstly, is mostly determined by purely technical (and not substantive) nuances, and secondly, it often changes retroactively when revising historical time series. Analysis of global experience indicates that the way out of this impasse can be the detecting of cyclical turning points based on the decisions of the special expert council, whose sole tasks include dating cyclical peaks and troughs. The article describes methodological approaches that the Economic Cycle Dating Committee (Russian Dating Committee, RDC) under the Association of Russian Economic Think Tanks (ARETT), is supposed to follow.
The final part of the article analyzes the ability of various Russian CLIs to timely warn when a new phase of the economic cycle is approaching, especially the impending recession. It is shown that expert opinions on the future dynamics of the Russian economy, contained in monthly press releases, are often more accurate than the conclusions that can be obtained based on the CLI trajectory using purely formal decision rules. On this basis, it is concluded that the existing Russian CLIs can be improved; this calls for clarification and finally fixing the dating of cyclical turning points (peaks and troughs), as well as for conducting additional research to identify various economic and financial indicators as the leading, synchronous or lagging indicators of the Russian economic cycle.
Available composite cyclical indicators for Russia are surveyed, their components are enumerated and analysed. The aims, guiding concepts, and approaches of the newly established Russian Economic Cycle Dating Committee are also described. All the currently available monthly Composite Leading Indices (CLIs) are tested against the most recent cyclical turning points for their capacity to provide a timely alarm signal, especially about an impending recession. It is shown that experts’ informal judgments about Russia’s future economic trajectory remain more informative than findings derived from formal empirical rules. This suggests that there is some room for improvement of the Russian CLIs and additional efforts should be made to construct better cyclical indicators for Russia.
This chapter begins with a brief history of the BRICS – from a purely analytical concept to the real-world political group with its own financial infrastructure. It then considers the role of the member countries in the global economy in terms of macro-indicators (territory, population and GDP), the production of a variety of key goods, trade and capital markets. Particular emphasis is placed on the rapid growth of the Chinese economy and the importance of its position in international commodity markets, the production of industrial goods, as well as other economic spheres. As a result, BRICS countries contribute significantly to global GDP growth, and the contribution of China is particularly important.
This volume focuses on the analysis and measurement of business cycles in Brazil, Russia, India, China and South Africa (BRICS). Divided into five parts, it begins with an overview of the main concepts and problems involved in monitoring and forecasting business cycles. Then it highlights the role of BRICS in the global economy and explores the interrelatedness of business cycles within BRICS. In turn, part two provides studies on the historical development of business cycles in the individual BRICS countries and describes the driving forces behind those cycles. Parts three and four present national business tendency surveys and composite cyclical indices for real-time monitoring and forecasting of various BRICS economies, while the final part discusses how the lessons learned in the BRICS countries can be used for the analysis of business cycles and their socio-political consequences in other emerging countries.
In many respects, the historical trajectory of the Russian economy during the Twentieth century has been a terra incognita until now. As for the official statistics, there are at least three important reasons for this. First, many relevant indicators were either not measured, or were kept secret and never published. Second, Russia (as the RSFSR) was a part of the USSR, and statistics for the RSFSR was much less prevalent than for the USSR as a whole (historical changes of the Russian borders also require special consideration). Third, an ideological dogma existed about the absence of inflation in the planned Soviet economy; therefore, all deflators (if any) were underestimated, and all aggregates in constant and/or comparable prices were overestimated (as were the corresponding growth rates). As for the unofficial historical estimates, most of them were focused on the USSR, not on the RSFSR. It’s very risky to use them as a proxy for historical indicators of the Russian Federation.
Hence, our first aim was to construct a statistical time-series that might be useful to describe the long-run trajectory of the Russian (the RSFSR and/or the RF) economy. Using previously unpublished data stored in Russian archives, we tried to extend them back as far as possible; in fact, most of them began in the late 1920s.
Our second aim was to denote periods of growth and contraction in the Russian economy and to reveal the economic factors that caused changes in trajectory. Periods of contractions during the era of the planned economy were of special interest for us. We found that recessions had occurred, not only in the market, but in the planned Russian economy as well (of course, with a significant remark that contractions in the planned economy were much rarer, but evidently more destructive).
In large countries, the development of national macroeconomic business cycles clearly involves regional nuances that, as a rule, fall outside scholars’ fields of vision, especially when monitoring the current economic situation. Regional statistics published by the Russian Federal State Statistics Service (Rosstat) are reviewed in terms of quality, and radical disagreement between “month-on-month” and “year-on-year” monthly statistics is identified. In view of this, an original method is proposed for estimating the level of regional economic activity (REA), based on monthly official regional statistics in five key sectors of the Russian economy: industry, construction, retail trade, wholesale trade, and paid services for the population. This method transforms current “year-on-year” growth rates into specially constructed dichotomous variables, which eliminate the excessive volatility and inaccuracy of the initial time series.
On these grounds, REA indices are estimated for all Russian constituent entities for the period from January 2005 to November 2017. Composite REA indices for all five economic sectors, eight federal districts, and Russia as a whole are then calculated. Methods for visualising multidimensional regional data are also proposed. They allow us to track the regional peculiarities of the Russian economy and to discern the current phase of the business cycle more accurately and without any additional lag. Several illustrative examples for the possible application of these indices in real-time monitoring and analyses are provided.
Background and motivation for a study of business cycles, business tendency surveys (BTSs), and cyclical indicators in the BRICS countries are specified. The main concepts and problems involved in monitoring and forecasting business cycles in emerging countries and countries in transition are overviewed; the importance of the experience of the BRICS in this context is demonstrated; different examples of the interaction between business cycles and social and political spheres are outlined. At last, the structure of the book is adduced.
The current best practices in measuring, monitoring, and forecasting economic cycles are drawn from the experience of mature economies such as the USA, Japan, and several Western European countries. Meanwhile, there are a lot of peculiarities in emerging economies that should be kept in mind when developing a system for tracking and forecasting their short-run dynamics. In the literature, there have been numerous attempts to apply the international best practices to emerging economies, but these attempts have usually been sporadic. The experience of the BRICS economies accumulated in this book allows for a fresh look on the problem of the development and use of cyclical indicators and is potentially useful for other emerging countries.
The Input-Output Structural Decomposition Analysis approach enables a fairly comprehensive and detailed analysis of the economic growth sources using the input-output model. The active use of this approach is currently hampered by the lack of a reliable instrumental method for constructing symmetrical input-output tables and deflators that permit the output and import indicators to be recalculated by types of products for different years into constant prices, as well as by ambiguity of interpretations of the content of growth sources. The paper discusses the ways to overcome these methodological problems and gives an example of the experimental use of the structural decomposition analysis approach based on the data of the inputoutput tables of the Russian Federation for 2011–2015.
The article considers the problem of the relationship of structural changes and economic growth in the global economy and Russia in the framework of different methodological approaches. At the same time, the paper provides the analysis of complementarity of economic policy types, which, on the one hand, are aimed at developing the fundamentals of GDP growth (institutions, human capital and macroeconomic stabilization), and on the other hand, at initiating growth (with stable fundamentals) with the help of structural policy measures. In the study of structural changes in the global economy, new forms of policies of this kind have been revealed, in particular aimed at identifying sectors — driversof economic growth based on a portfolio approach. In a given paper a preliminary version of the model of the Russian economy is provided, using a multisector version of the Thirlwall’s Law. Besides, the authors highlight a number of target parameters of indicators of competitiveness of the sectors of the Russian economy that allow us to expect its growth rate to accelerate above the exogenously given growth rate of the world economy.
This article addresses the framework for constructing and analysing National Transfer Accounts. NTA is a very useful analysis tool to study changes in the age structure of the population and income distribution processes between generations, and their economic impact on GDP. In some countries, NTA is actively used in long-term macroeconomic forecasting (on 40-years period and more). Main NTA indicators calculate with using of national accounts database (SNA). A vital element of the research is determining economic lifecycle results for all age-groups and identify its primary funding sources.
The article considers comprehensive methodological and practical approaches to the compiling the three aggregate transfer accounts - life cycle account, public reallocation account and private reallocation account - and using them as a basis for the analysis of socio-demographic processes in Russia. The macro analysis presented in the article is based on statistics of national accounts and other information sources for the years 2003-2017.
The conducted analysis resulted in compiling the system of aggregate transfer accounts for Russia for 2003-2017 and in identifying quantitative parameters of Russian economy life cycle balance and in examining qualitative changes in its funding sources. The authors own analysis demonstrated that while in 2003-2010 economic life circle balance was positive (except for the crisis year of 2009), in 2011-2016 it became negative. The State has been playing an increasing role in financing the economic life cycle deficit.
This paper is devoted to the study of the degree of trust (and distrust) in Russia, and to the assessment of the possible impact of trust on the level of the economic development of Russia. The level of social trust in Russia is lower than in many developed countries. The armed forces and the church are the most trusted institutions in Russia; besides that, political trust is quite strong, especially the trust in the president. At the same time, the business, especially private, is still experiencing considerable mistrust from Russians. The estimations confirmed the existence of the relationship between trust and the level of economic development in different countries. The gap between Russia and a number of developed countries in terms of GDP per capita may be significantly connected to the continuing distrust within society.
The article analyzes the relationship of structural changes with economic growth in the world economy and Russia. The authors note the emergence of a growth model in the world economy based on the complementarity of economic policies aimed, on the one hand, at the development of fundamental foundations of economic growth (institutions, human capital, infrastructure, macroeconomic stabilization), and, on the other hand, at initiating growth through structural reforms (even under stable foundations). Analyzing the trends of structural changes in the world economy, the authors consider new forms of structural policy, in particular the kind that is aimed at the identification of sectors – the engines (or escalators) of economic growth using the portfolio approach. A preliminary version of the model of the Russian economy based on the multi-sector variety of the Thirwall law is constructed.
The article assesses the situation in the Russian economy after a two-year recovery and the outlined signs of stagnation associated with both the slowdown of the global economy and the exhaustion of domestic sources of improved market conditions. The approaches to identifying the factors that initiate growth and are different from the factors that support it are considered. In this case, emphasis was placed on the factors of uncertainty of the economic situation and the lack of domestic demand. The approaches to accelerating growth based on macroeconomic and structural policy measures are formulated, forecasts of the Russian economy dynamics for the coming years are analyzed.
