Analytics and Forecast
The paper analyzes the current state of the world economy and offers a short-termforecast of its development. Our analysis of log-periodic oscillations in the DJIAdynamics suggests that in the second half of 2017 the United States and other moredeveloped countries could experience a new recession, due to the third phase of theglobal financial crisis. The economies of developing countries will continue theirslowdown due to lower prices of raw commodities and the increased pressure of dollardebt load. The bottom of the slowdown in global economic growth is expected tobe achieved in 2017–2018. Then we expect the start of a new acceleration of globaleconomic growth at the upswing phase of the 6th Kondratieff cycle (2018–2050). Thisupswing will be driven by the development of the 6th technological paradigm whosecore is being created by the NBIC-convergence (that is the convergence of nano-,bio-, information, and cognitive technologies). A speedy and steady withdrawal fromthe third phase of the global financial crisis requires cooperative action betweendeveloped and developing countries within G20 to stimulate global demand, worldtrade and a fair solution of the debt problem of developing countries. On the otherhand, the governments of the technologically advanced countries should concentrate resources and efforts on the stimulation of the practical application of the NBIC technologies because they form the core of the 6th technological paradigm and anew structure of the world economy. The period between 2017 and 2024 is the mostfavorable for the mastering and diffusion of the breakthrough innovations of the 6th Kondratieff wave.
Keywords: global economic dynamics, Kondratieff economic cycles, global crisis, financialcrisis, forecast.
JEL: E32, E37, F01, F63.
|Margarita A. Gvozdeva, Maria V. Kazakova, Ivan L. Lyubimov, Kristina V. Nesterova||40-57|
We estimate the impact of a range of macro level variables, as well as the countries’ schoolsystem specifics on students’ performance in PISA international test in mathematics,an indicator that is broadly accepted as a measure of a country’s human capital stock.We estimate a panel of 51 economies from the OECD database for 1999–2011. Ourresults suggest that, after controlling for the level of GDP per capita, certain social anddemographic indicators appear to have a significant positive effect on human capitalformation at school. They include the share of urban population, low level of incomeinequality (measured in terms of the Gini index), low share of immigrants in totalpopulation and the prevalence of skill-based immigration. Moreover, school systems thatcarry out external exams and have no early tracking system show better results in PISA.The latter effect is significantly stronger for countries where skill-based immigrationflow is subdued by alternative immigration channels such as humanitarian-based,kinship-based, etc. This implies that tracking might impede integration of students fromimmigrant families with lower social status. Our results are consistent with a number ofstudies where the impact of the school system features and macroeconomic variables oneducation quality is considered.
Keywords: human capital, economic growth, school system.
JEL: O10, O15, I25, I26, J60, I61.
Margarita A. Gvozdeva, Russian Presidential Academy of National Economy and Public Administration
Ivan L. Lyubimov, PhD (Econ.), Russian Presidential Academy of National Economy and Public Administration
Maria V. Kazakova, Dr. Sci. (Econ.). Gaidar Institute for Economic Policy.(3–5, build. 1, Gazetny per., Moscow, 125993, Russian Federation), Russian Presidential Academy of National Economy and Public Administration
Kristina V. Nesterova, Russian Presidential Academy of National Economy and Public Administration
|Tatiana V. KOSSOVA, Elena V. KOSSOVA, Maria А. SHELUNTSOVA||58-83
In this paper, we estimate the relationship between alcohol consumption and averagelife expectancy at birth as well as mortality from external causes in Russian regions.Statistics was collected from the Federal State Statistics Service of Russia for the periodfrom 2008 to 2013. Alcohol sales in liters per capita serve as a proxy measure for alcohol consumption in a particular region. We convert different types of consumed alcoholicbeverages to grams of absolute alcohol according to the percentage content of alcohol ina corresponding drink. The method of instrumental variables is applied for panel modelswith fixed effects. We investigate the relationship between life expectancy at birth formen and women as well as mortality from external causes and macroeconomic factorsincluding average per capita income, unemployment rate, Gini coefficient and volumeof alcohol consumption. Estimation results show strong positive relationship betweenalcohol consumption and mortality from external causes. The relationship betweenalcohol consumption and life expectancy is negative. These conclusions hold for bothmen and women. The increase in the total volume of alcohol consumption has a negativeimpact on public health, and to the greatest extent it relates to the male population. Thisleads to the formation of significant gender gap in life expectancy at birth in Russianregions. Findings are useful for the government policy aimed to prevent the populationfrom alcohol abuse and to increase average life expectancy at birth.
Keywords: alcohol consumption, inter-regional differences, life expectancy, mortality fromexternal causes, Russian regions.
Maria А. Sheluntsova, Cand. Sci. (Econ.), National Research University Higher School of Economics (20, Myasnitskaya ul., Moscow, 101000, Russian Federation).
|Yury М. GORLIN||84-113
Objective demographic and socioeconomic tendencies stipulate the increasing numberof retirees with respect to employees and employers who pay compulsory pensioncontributions. This intensifies the financial pressure on the pension system. Since theproblem of raising the retirement age has not been solved, the one way to improve thefinancial stability of the pension system is to incentivise the delayed retirement.The necessity for the development and realisation of a mechanism for additionalincentives for the delayed retirement was anticipated in the Strategy for the long-termdevelopment of the Russian Pension System (Strategy). With the aim of realisation of theStrategy, there was anticipated additional coefficients for individual pension coefficients.These coefficients are used to calculate the base and insurance parts of the old-agepension.During the development of the Federal law about insurance pensions and appropriatemeasures to incentivise the delayed retirement, the macroeconomics situationin the Russian Federation was more stable than nowadays. A deterioration in themacroeconomic situation in the Russian Federation, in addition with the growth ofthe geopolitical instability after 2014, caused an increase in socioeconomic uncertaintyand associated risks, including risks of the pension system. As a result, according to thedata from the Pension Fund of the Russian Federation between 01.01.16 and 01.06.16,the total number of individuals, who decided to delay their retirement, was about100 thousand.Therefore, in the new macroeconomic reality it is an actual task to review measures thatwas developed to incentivise the delayed retirement.
Keywords: insurance pension, individual pension coefficients, delayed retirement, presentvalue of pension payments.
JEL: J14, J26.
НАЛОГОВАЯ И БЮДЖЕТНАЯ ПОЛИТИКА
Insolvency of the taxation system in new conditions of market economy when it couldnot perform the main functions — to provide growth of budget receipts (they will bedecreased up to 2019), to stimulate growth of economy, to redistribute the income fromthe rich to the poor is considered in the article. The general indicator of the tax burden of Russia equal to 33–35% of GDP is analyzed in comparison with other countries. Thoughthis tax burden is approximately equal to average values in developed countries, it isoffered to reduce it as Russia are less developed country and more means are necessary forenterprises and the population to have sources of more quick development. It is offeredto reduce it to the level of developing countries, i. e. less than 30% of GDP. At the sametime, it is offered to reduce tax burden on business considerably in order to compensatepartially the growth of wages which is necessary to ensure the increase the income ofthe population (i. e. indexation connected with the rise of the taxes). It is necessaryto aim our taxation system to stimulate business activity, the growth of economy andinvestments. Also measures for strengthening a distribution role of taxation in reductionan unreasonable difference in welfare of the rich and the poor in Russia are considered.For the poor the taxes should be decreased, and to the rich — increased in the form ofthe direct taxes on the income, the real estate, inheritance and in the form of indirecttaxes — excises on luxury goods.
Keywords: functions of the taxation system, the tax burden, reforming obligatory socialpayments, the international trends of changing the taxation system.
JEL: D31, E60, E62, E64.
Excerpt from the book
The book “Government versus Markets: The Changing Economic Role of the State”is the first comprehensive treatment available in the literature of the economic role ofthe state in a historical and world perspective. It addresses the fundamental question ofwhat governments should do, or have attempted to do, in economic activities in pastand recent periods. It also speculates on what they are likely or may be forced to do infuture years. Although other recent titles in economics deal with normative theories,public choice theories, welfare state analysis, social protection, and the like, no otherbook has the same breadth or depth specifically on the state’s viable economic role.The author’s knowledge of several languages has allowed him to draw from differentand often inaccessible previous publications. The investigation assembles a large setof statistical information that should prove useful to scholars and policy makers in theperennial discussion of government’s optimal economic roles. It will become an essentialreference work on the analytical borders between the market and the state and on whata reasonable “exit strategy” from the current fiscal crises should be.The first chapter of the book excerpts from which are published here gives the generaloutlook of the problem of the role of government in present world situation and inthe foreseeable future. The author argues that the most probable development wouldbe decrease of the role of government spending and taxation and the shift of focus ofgovernment policy to regulation and targeted public assistance.
Keywords: economic role of the state, public expenditure, taxation, public debt, fiscal crisis,market failure, behavioral economics.
JEL: H1, H2, H5.
Vito Tanzi, Ph. D. (Econ.), Honorary President of the International Institute of PublicFinance (IIPF) (5912 Walhonding Road, Bethesda, MD, 20816, USA).
|Mikhail Ye. MAMONOV||166-199|
In the first three years after the Head’s replacement, the Central Bank of Russia haswithdrawn the licenses of each third bank in the system and afterwards has discoveredthat substantial part of these failed banks hided “holes” in their capital that amountedto 2,1% of GDP. In this paper, a first attempt was made to predict the size of the “holes”of that failed Russian banks. For that purpose, international research employs quitesimple indicators that reflect bank’s assets and liabilities, size and risk exposures. Weformulate three new hypotheses to describe the “holes” in the capital — balance sheetfalsification (H1), high assets’ rollovers (H2), and low margins of banking business(H3) — and propose what we call complex indicators to test them. We obtain officialdata on revealed “holes” in banks’ capital from the “Vestniki Banka Rossii” over theperiod from the mid‑2013 to the beginning of 2016, so that the initial sample covers106 failed banks and the filtered sample includes 89 of them. We found that thesecomplex indicators bring gains when describing the size of the “holes” using simpleindicators. Moreover, the strongest economic effects belong to the complex indicators.In particular, if a bank has already failed, then the “hole” is expected to be as large as(1) higher were the rollovers on corporate loans, (2) greater was the specialization onattracting (expensive) retail deposits and investing them in (cheap) corporate loans,(3) greater was the size of the bank, (4) higher were the rollovers on the correspondentaccounts in the Bank of Russia, (5) lower was the bank’s capital disclosed on the eveof its license withdrawal.
Keywords: banks, «hole» in the capital, license withdrawal, balance sheet falsification, assets’rollovers, low margins.
JEL: G21, P23, P34, P52.
|Igor V. BELYAKOV||200-225|
The cost of external sovereign borrowing is divided into two components — the firstreflects the price of so-called risk-free borrowing on the global market and the secondrepresents the level of sovereign credit risk for a given country. The paper analyses thedeterminants of risk premium for Russia-issued sovereign dollar-denominated Eurobondsand the impact of oil prices on the Russian sovereign Eurobonds spread in particular.While there are many empirical studies on the determinants of the sovereign spreads foremerging markets countries, the studies on this topic for oil-dependent countries or forRussia specifically are scarce. The paper systemizes the results of the issues for emergingmarkets countries and also gives a comparison with the adjacent topic — determinantsof sovereign credit default swaps.The model developed in the paper uses the well-known GARCH technique with monthlydata from 2003 to 2016, including EMBIG index, S&P500 and VIX indices, oil pricesand the macro-indicators of the Russian economy. The analysis justifies the foremost roleof the global factors as determinants of the Russian spread and gives a row of elasticityestimations. In particular, the impact of oil prices on Russian sovereign Eurobond spreadsis proved to be negative and significant.The results of this study could be used in the planning and elaboration of the Russiansovereign debt policy. In particular, the findings are relevant to the strategy of optimizationof expected borrowing costs.
Keywords: public debt, sovereign bond, yield spread, GARCH, oil prices.
JEL: H63, G12, G15.
|Elena V. SHOLOMITSKAYA||226-249
There are two major types of investments — capital investment and investment inM&A deals. In this paper the author examines the relationship between new capitalinvestments and investments in acquisitions in Russia using data for more than onehundred companies in 2004–2014. The period is split into two sub-samples — periodof rapid growth (before the global financial crisis of 2008) and post-crisis one (after2009). Our results show that relationship between fixed investments and investmentsin acquisitions is opposite for two periods. In the first period, relationship between twotypes of investment was positive or insignificant which possibly means that companiesdid not face the trade-off between investment forms. After the global financial crisis,when monetary conditions and access to external capital markets for Russia tightenedconsiderably, the relationship between investment in new capital and investment inacquisitions became negative. It proves that companies faced a trade-off between twoinvestment forms. Moreover, acquisitions became dependent on company’s profitability.Such a trade-off can be crucial for developing economies since they are more dependenton external financing. These results can provide policy implications given the newunderstanding of financial constraint significance for investment.
Keywords: investments in fixed assets, M&A transactions, financial constraints.
JEL: D92, E22, G31, G39.
Elena V. Sholomitskaya, National Research University Higher Schoolof Economics (28/11, Shabolovka ul., Moscow, 115162, Russian Federation).
|Denis V. KADOCHNIKOV||250-256|
Gaidar Institute Publishing House has published the Russian translation of the book bythe famous American Professor Robert Ellickson. The book describes the phenomenon ofstable social order forming independently of legal system. Ellickson is not only interestedin the mere fact of the formation and stability of informal norms, but also in the existenceof non-legal approach to dispute settlement, including disputes related to legal rightsviolation. In his book, Robert Ellickson brings together theoretical assumptions andmethods used in two important schools or traditions in the study of the interaction oflaw and social phenomena that emerged in the United States, namely in the “Law andSociety” movement and in the “Law and Economics” movement. The practical basis ofthe research was a detailed study by the author of the dispute resolution practices amongfarmers in Shasta County located in the U.S. state of California. Based on the solidtheoretical foundation as well as on the results of field research, the author concludesthat the order based on law and enforced by state institutions, and the order formedwithout law and the state exist simultaneously, complementing each other. Ellicksonoffers his own theoretical interpretation of social control and its elements, based on who exercises control, who monitors the adherence to or violation of rules, and whorewards or punishes it. Firmly grounded both theoretically and empirically the findingsof Ellickson’s study are an important and helpful reminder about objective limits ofeffective government intervention in society and economy and about limited role of lawin human life.
Keywords: economics, law, informal norms, social order.
JEL: D7, K00.