Browsing by Subject "Russia"

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  • Deryugina, Elena; Ponomarenko, Alexey (2014)
    BOFIT Discussion Papers 22/2014
    Published in Emerging Markets Finance and Trade, vol. 51(6), pages 1261 – 1275, October 2015 as Accounting for Post-Crisis Macroeconomic Developments in Russia: A Large Bayesian Vector Autoregression Model Approach.
    We apply an econometric approach developed specifically to address the ‘curse of dimensionality’ in Russian data and estimate a Bayesian vector autoregression model comprising 14 major domestic real, price and monetary macroeconomic indicators as well as external sector variables. We conduct several types of exercise to validate our model: impulse response analysis, recursive forecasting and counter factual simulation. Our results demonstrate that the employed methodology is highly appropriate for economic modelling in Russia. We also show that post-crisis real sector developments in Russia could be accurately forecast if conditioned on the oil price and EU GDP (but not if conditioned on the oil price alone). Publication keywords: Bayesian vector autoregression, forecasting, Russia
  • Korhonen, Iikka; Nuutilainen, Riikka (2016)
    BOFIT Discussion Papers 2/2016
    We estimate several monetary policy rules for Russia for the period 2003–2015. We find that the traditional Taylor rule describes the conduct of monetary policy in Russia reasonably well, whether coefficients are restricted to being the same or allowed to change over the sample period. We find that the Bank of Russia often overshot its inflation target and that extensive overshooting is associated with large depreciations of the ruble, testifying to the importance of the exchange rate in the conduct of monetary policy in Russia.
  • Kudrin, Alexey; Gurvich, Evsey (2015)
    BOFIT Policy Brief 1/2015
    This article first appeared in Russian in the journal Voprosy Ekonomiki No. 12, 2014.
    ​The slowdown of the Russian economy is due to chronic factors and cannot be cured by simple fixes such as relaxing monetary or fiscal policy. The biggest impediment to growth in Russia’s case is the weak market environment, evidenced foremost by the dominance of state-owned enterprises and quasi-government companies. Strong incentives for business and public administration to enhance efficiency are required. The key policy objectives necessary to move Russia away from its current model based on imported growth to a new growth model are laid out in this analysis.
  • Libman, Alexander; Vollan, Björn (2015)
    BOFIT Discussion Papers 14/2015
    Anti-Western conspiracies are frequently used by Governments to strengthen their power. We investigate the impact of conspiracy thinking on expectations of collusion among individuals in Russia and China. For this purpose, we conduct a novel laboratory experiment to measure expectations of collusion and several survey items related to conspiracy thinking. Our survey results indicate that anti-Western conspiracy thinking is widespread in both countries and correlates with distrust. We find a significant effect of anti-Western conspiracy thinking in China: Anti-Western conspiracy thinking correlates with lower expectations of collusion. We explain this result by stronger ingroup feeling emanating from the anti-Western sentiment. Our paper provides a first step in analyzing the economic implications of conspiracy thinking for society.
  • Lyubimov, Ivan (2016)
    BOFIT Policy Brief 7/2016
    ​In this short paper, we emphasize the importance of reforms sequencing and discuss it in the context of potential educational and institutional reforms in Russia. As weak institutions correspond to a more binding constraint on economic growth than a stagnant education system, we argue that an educational policy is likely to be effective only if it takes place after broader institutional reform is implemented. Otherwise, even a properly implemented education reform might fail to boost economic growth.
  • Mamonov, Mikhail; Vernikov, Andrei (2015)
    BOFIT Discussion Papers 22/2015
    Published in Economic Systems, Volume 41, Issue 2, June 2017, Pages 305–319 as Bank ownership and cost efficiency: New empirical evidence from Russia.
    This paper considers the comparative efficiency of public, private, and foreign banks in Rus-sia, a transition economy with several unusual features. We perform stochastic frontier anal-ysis (SFA) of Russian bank-level quarterly data over the period 2005–2013. The method of computation of comparative cost efficiency is amended to control for the effect of revalua-tion of foreign currency items in bank balance sheets. Public banks are split into core and other state-controlled banks. Employing the generalized method of moments, we estimate a set of distance functions that measure the observed differences in SFA scores of banks and bank clusters (heterogeneity in risk preference and asset structure) to explain changes in bank efficiency rankings. Our results for comparative Russian bank efficiency show higher efficiency scores, less volatility, and narrower spreads between the scores of different bank types than in previous studies. Foreign banks appear to be the least cost-efficient market participants, while core state banks on average are nearly as efficient as private domestic banks. We suggest that foreign banks gain cost-efficiency when they increase their loans-to-assets ratios above the sample median level. Core state banks, conversely, lead in terms of cost efficiency when their loans-to-assets ratio falls below the sample median level. The presented approach is potentially applicable to analysis of bank efficiency in other dollarized emerging markets.
  • Belousova, Veronika; Karminsky, Alexander; Kozyr, Ilya (2018)
    BOFIT Discussion Papers 5/2018
    The paper examines how the type of ownership affects the profit efficiency of Russian banks. Using bank-quarter data for selected banks in the period 2004–2015, we combine stochastic frontier anal-ysis (SFA) methodology with an intermediary approach to assess profit efficiency. Our key findings show that foreign-owned banks are the most efficient, followed by state-owned banks and private domestic banks. We also find that the profit efficiency of foreign-owned banks was higher than that of other banks during the economically stable periods of 2004Q1 to 2008Q2 and 2014Q1 to 2015Q3, and that state-owned banks were more efficient than others in the period of financial turmoil from 2008Q3 to 2013Q4 due to state support. These results are robust when we consider these banks in terms of branch network diversity, risk preferences, and specialization.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2008)
    BOFIT Forecast for Russia 1/2008
    In light of last year's faster-than-expected growth of the Russian economy, BOFIT's growth forecast has been revised upward. The forecast for 2008 2010 puts this year's growth rate at nearly 8%, easing to 6% per annum by the end of the forecast period. The outlook for rapid growth is bolstered by a projected oil price (Urals grade) in the range of USD 80 to USD 90 per barrel. While brisk consumption growth remains the basis of Russia's economic growth, booming investment has recently taken on a greater importance. Because Russia's imports are predicted to continue to expand faster than exports, the current account surplus could disappear by 2011.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2008)
    BOFIT Forecast for Russia 2/2008
    The growth forecast for Russia for 2008 2010 has been revised slightly upwards in response to higher oil prices. Economic growth is expected to remain close to 8% this year and to slow to just over 6% by 2010. Both consumption and investment demand will grow rapidly, but economic growth will gradually moderate as the price of oil stabilises and capacity constraints press harder. Imports will continue to grow much faster than exports
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2009)
    BOFIT Forecast for Russia 1/2009
    The growth forecast for Russia has been substantially scaled down since last autumn in the wake of a pronounced deterioration in the external environment. The crash in oil prices is markedly squeezing domestic incomes, and capital can no longer be obtained from the international markets. Growth in consumption is expected to fade and investment to decline markedly. Weak international demand is having a modest contractionary effect on export volumes. Import volume will decline much more dramatically, in line with the depreciation of the rouble and soft demand. Total output is projected to decline slightly this year and then to gradually recover in 2010 2011 as the world economy gains momentum.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2009)
    BOFIT Forecast for Russia 2/2009
    Russian GDP apparently bottomed out in the summer and turn up in the latter half of 2009, driven by modest growth in consumption and export demand. Exports will be supported by a moderate recovery in the world economy, and consumption demand will get a boost from higher oil prices. Investment is not expected to pick up until next year. The modest growth in GDP will also promote a modest recovery in imports. For 2009 as a whole, both total output and imports are expected to decrease substantially, due to the weak performance in early part of the year, but to turn up in 2010 2011.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2010)
    BOFIT Forecast for Russia 2/2010
    Following an exceptionally severe recession, the Russian economy has returned to a path of growth. The economy is expected to continue to post high growth rates over the forecast period, in line with the BOFIT forecast of winter 2010, even if the projected growth for the current year has been lowered because of a slower-than-expected recovery. We also look for rapid growth of imports. While the forecast calls for a slight moderation of both economic growth and imports in the course of the forecast period, the economy should continue to post annual growth rates of nearly 5% almost until the end of the forecast period. Meanwhile, imports are likely to increase at more than 10% pa. To be sure, the projected growth does not match the robust rates of the protracted pre-recession period of 2000-2008. GDP should climb back to its level of 2008, the year immediately preceding the re-cession, around the middle of next year.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2010)
    BOFIT Forecast for Russia 1/2010
    Russia's aggregate output dropped last year by a record 8% even though the economy bottomed out already in the second quarter and posted positive growth in the third quarter. Russia's aggregate output and imports are now estimated to grow faster than envisaged in the BOFIT forecast of autumn 2009 supported by the low comparison basis and strong consumption demand. The growth rate could decline in 2011-2012, but it is expected to remain in the region of 4%.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2011)
    BOFIT Forecast for Russia 2/2011
    This year, the Russian economy has grown more slowly and imports recovered front-loaded at a more accelerated rate than forecast. GDP growth expectations have been scaled down, in particular for this year. The economy is expected to grow fairly briskly during the forecast period and imports to increase rapidly, although the growth rate of both is expected to slow. GDP growth is predicted to slow from below 4.5% for 2011-2012 to below 4% in 2013, even if the oil price is assumed to decrease only slightly in the forecast period. The demand growth in Russia continues to be directed strongly towards imports, which is expected to increase 20% this year and just below 10% for 2012-2013. For its part, this propensity to import is limiting GDP growth. GDP is expected to rise to the peak seen in the pre-crisis year of 2008 this autumn and imports to reach the respective peak in winter.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2011)
    BOFIT Forecast for Russia 1/2011
    Recovery of the Russian economy from one of the world's most severe recession-induced declines in output slowed down temporarily in autumn 2010 but continued in winter. The forecast envisions (as in core of the late-summer forecast) brisk recovery and growth of the economy and even faster growth of imports. GDP growth is expected to slow gradually from about 5% pa in 2011-2012 to ca 4% in 2013, assuming an oil price of about USD 100 a barrel over the course of the forecast period. GDP growth will be subject to a dampening effect from continuing rapid growth of imports - ca 15% in 2011 and 10% pa in 2012-2013. GDP is expected to match the pre-recession peak level of summer 2008 in the autumn of this year and imports around the end of the year.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2012)
    BOFIT Forecast for Russia 1/2012
    Last year, both the Russian economy and imports continued their recovery from deep recession. For all of 2011, GDP was up 4.3 % and imports climbed over a fifth, and by late 2011, Russian economic output and imports had recovered to their 2008 pre-crisis peaks. Economic growth of around 3.5 % p.a. is expected throughout our 2012?2014 forecast period. Imports should still rise at around 7% p.a. Growth in private consumption and investment are expected to dip slightly this year in reaction to international and domestic uncertainties, but then recover in 2013. Growth of the economy is likely to slow towards the end of the forecast period if the oil price does not rise (a slight drop is anticipated). Increases in Russia's export volume should be quite slow as growth in export volumes of oil and petroleum products are expected to remain flat or decline slightly.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2012)
    BOFIT Forecast for Russia 2/2012
    While the Russian economy enjoyed growth of about 4.5 % per annum in the first half of 2012 and witnessed fairly good growth in imports, our forecast sees GDP growth tapering off in the second half of this year and settling at above 3.5 % p.a. this year and in 2013. Growth will be slightly lower in 2014. Our prognosis of slowing growth is based on an assumption that oil prices will not rise. Import growth will also moderate to around 10 % p.a. this year and around 5 % in 2013 and 2014. The rise in private consumption will slow, but it will still remain brisk. The uncertain outlook for oil and gas exports will subdue growth in the volume of Russian exports. Both international and domestic uncertainty will weigh on growth in fixed investment this year, but investment growth will revive next year.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2013)
    BOFIT Forecast for Russia 1/2013
    The Russian economy grew 3.4 % last year. Growth slowed considerably in the second half of 2012 with GDP growth dipping below 3% after growing at a 4.5 % pace in the first half. Russian imports grew rapidly until the end of the year, and were up nearly 9 % for 2012 overall. Our forecast sees GDP rising 3.4 % this year and next. Growth will slow in 2015 if, as we expect, the oil price does not rise. Import growth will subside this year and next to around 5 % a year, and then pick up a bit in 2015. Growth in private consumption, though brisk, will be slightly slowing. The volume of Russian exports will increase modestly due to weak development of energy exports. Fixed investment growth should pick up gradually, but investments are still subject to substantial uncertainty both domestically and in international markets.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2013)
    BOFIT Forecast for Russia 2/2013
    The slowdown in Russian economic growth to around 1.5% p.a. in the first half was significantly sharper than predicted. The drop largely reflects cuts in investment by state-owned enterprises and the public sector. We expect the Russian economy to pick up this year as recovery in the global economy gets underway. GDP growth for all of 2013 should reach nearly 2%. If the oil price declines slightly during the forecast period as we assume, it will weigh on Russian economic growth. Nevertheless, GDP growth should slightly exceed 3% p.a. in 2014 and 2015 as the recovery of world trade gives a small lift to Russian exports. Although household incomes will not rise as fast as earlier, lower inflation will slightly increase household purchasing power. Investment should return to growth as capacity constraints are not far. Growth in public sector spending will slow. Growth in Russian imports should pick up slightly to around 5% p.a.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2014)
    BOFIT Forecast for Russia 1/2014
    Russian GDP growth of 1.3% last year undershot forecasts, due to a tangible slowdown in domestic demand. There was a steep decline in fixed capital investments of state enterprises and the state. Consumption growth slowed. Despite a pickup in global economic growth and world trade, growth of the Russian economy will slow further this year as the events in the Crimea cause the postponement of investments. Imports will take a slight dip. In 2015 and 2016, we do not expect the oil price to rise, butt growth in Russia will pick up slightly as the global economy continues to revive. As long as the effects of the Crimean events stay contained, the economy should still grow about one and a half per cent p.a. in 2015 and 2016. Import growth should run at a couple of per cent p.a. Output growth may become constrained by the capital stock and low productivity gains due to weak fixed capital investments. The forecast is subject to substantial downside especially as regards the effects of the Crimean situation. Russia's leadership could respond to weak growth with higher state spending and boosting credit via the banking system. In the longer term, Russian economic growth will stay at about a 2% p.a. trend, if Russia does not move ahead with necessary systemic reforms faster and on a broader basis than in recent years.