BOFIT Policy Brief (2014- )


A series devoted to analytical studies by BOFIT economists and guest researchers. The focus is on descriptive work on economic policy and economic developments in transition economies. BOFIT Policy Brief papers are published either in Finnish or in English. The series was called BOFIT Online until 2013.

Recent Submissions

  • Solanko, Laura (2020)
    BOFIT Policy Brief 1/2020
    This paper gives a concise overview of the economic difficulties and policy responses in Putin’s Russia from the late 1990s to present. The discussion concludes with thoughts on future challenges facing Russia.
  • Simola, Heli (2019)
    BOFIT Policy Brief 4/2019
    Russia is integrated with the global economy through trade and financial linkages, making it vulnerable to external shocks. To gain perspective on the importance of various external factors, we present a brief description of Russia’s foreign economic relations and review the recent literature on the effects of foreign shocks on the Russian economy. We examine the impacts on Russian GDP from oil price, foreign output and interest-rate shocks and Western sanctions, as well as exchange-rate pass-through to Russian consumer price inflation. Our review shows that external shocks are important for Russian economic fluctuations. In quantitative terms, the estimates on long-term impacts of different external shocks vary from 0.1 % to 2 % of Russian GDP.
  • Sprenger, Carsten; Todorović, Srdjan (2019)
    BOFIT Policy Brief 3/2019
    Corporate governance can play an important complementary role in banking regulation by limiting excessive risk-taking by managers and shareholders at the expense of creditors, including small depositors. This paper provides a detailed analysis of corporate governance in Russia’s 30 largest banks during the period from 2007 to 2017. We look at several governance features, including ownership structure, the size, composition and compensation of the boards of directors, as well as CEO characteristics. Based on our findings, we recommend policymakers focus on strengthening the role of independent directors in non-listed banks, address signs of managerial entrenchment in state-owned banks (long tenure and compensation above the level of private and foreign banks), and improve disclosure about board independence, board committees, and the backgrounds of board members.
  • Korhonen, Iikka (2019)
    BOFIT Policy Brief 2/2019
    In this note, I review the literature on the economic effects of sanctions against Russia and Russia’s counter-sanctions. As a general observation, studies of the macroeconomic effects of sanctions on Russia and their effects on international trade and financial flows must deal with the nearly concurrent oil price collapse at the introduction of sanctions. Most papers support the view that sanctions have worked as planned, noting the drag they have imposed on Russia’s general economic development since 2014. This adverse effect most likely operates by depressing both foreign trade and foreign capital flows into Russia. Russia’s own counter-sanctions have also had a clear negative effect on the welfare of the average Russian household.
  • Hake, Mariya; Radzyner, Alice (2019)
    BOFIT Policy Brief 1/2019
    Although the European Union (EU) countries constitute the largest trade partner and investor of the Western Balkan economies, economic exposure in terms of trade and investments to Turkey, Russia and China has been on the rise in the past decade. Turkey is among the top trading partners of Serbia and Bosnia and Herzegovina, while its investments in the banking sectors in the rest of the Western Balkan economies is gaining also in importance. Going further, the trade volume with Russia is overall small except for Serbia, however, Russian investments are sizable in key sectors (e.g energy, real estate) in Montenegro and Bosnia and Herzegovina. Financial and economic ties with China have intensified particularly between 2015 and 2017, not least because the region is part of the New Silk Road and the so-called “16+1 format”. China invests in regional infrastructure, such as ports, railroads and highways mainly in Albania, Bosnia and Herzegovina, FYR Macedonia, Montenegro and Serbia. Overall, the growing influence of non-EU global players poses an additional pressure on the EU to thoroughly follow its Western Balkan strategy.