Economics

Migrants make a substantial contribution to the economy of the Russian capital, accounting for over 20% of its GRP. Up to two-thirds comes from residents of other Russian regions. The significant role of internal migration is what sets Moscow apart from many other global cities.

The degree of monetary tightening for a sustainable disinflation depends not only on the inflation rate, but also on the conditions that have led to its rise. There are three reasons why considerable monetary tightness might need to be maintained even when inflation decelerates.

Human capital and its key component – education – are strongly linked to economic growth. However, high levels of education do not guarantee economic growth if a weak institutional environment hinders efficient application of knowledge and skills.

What tectonic shifts are occurring in the world economy and global trade, who are the potential winners and losers in this process, and how the global financial and economic landscape will alter after the storm are the questions addressed by Financial Congress participants.

While advanced economies were promoting the climate agenda as ideology, the Global South was investing in renewable energies and new technology markets. Energy transition is still underway in both ‘worlds’. What this means to Russia was discussed at the Financial Congress.

The Russian labour market is gradually cooling, but high unemployment does not threaten it. The main challenge for the economy is not so much labour shortages as a lack of highly qualified specialists, analyzed the participants of the Financial Congress.

Is it possible to ‘buy’ economic growth with high inflation, how demand ‘accumulated’ over years, what investments increase productivity, and where forecasters make a mistake: abstracts from the Financial Congress session dedicated to economic growth.

Although the real estate market is a separate sector, it is characterised by what is called ‘macro-criticality’. This means that the effects of changes in the market extend beyond it and may have an impact on macroeconomic stability in general.

Suboptimal and erroneous financial decisions people make often stem from cognitive biases. Their effect can be mitigated by impacting two key aspects – people’s behaviour and the decision-making environment.

The impact of population ageing on inflation remains contentious, as researchers’ opinions differ as to whether ageing has a deflationary or proinflationary effect. Our work uses data from the Russian regions to show that an elderly population has a proinflationary effect.

An import reduction has a more than proportionate impact on Russia’s industrial output and exports. Over one year, a 1% decrease in imports as a share of production costs across industries leads to a more than 2% output reduction and an even more significant decline in exports.

Why should we expect a slowdown of the Russian economy, what traps has it fallen into, what will help curb inflation, and what are the fiscal policy risks? These issues were discussed by economists at the Financial Congress of the Bank of Russia.

The macroeconomic situation is the overall performance of the country’s regional economies. Experts at the Bank of Russia’s Financial Congress assessed which regions are benefiting and which are losing out as a result of the ongoing transformation and structural changes.

Modern technology and big data on retail sales enable more accurate and faster measurement of inflation. We are developing a methodology for calculating a price index based on data from online receipts: in the future, it will make it possible to track inflation in near real time.

In a geographically large economy, different regions can respond differently to the same events. Nowcasting used for data across Russia revealed these differences as well as their dependence on the level of development and the sectoral specialisation of the regions.

There is not a single industry in Russia in which the overhang of job vacancies is not rising. Although the renewed growth of real wages will reduce this overhang, the labour shortage may persist for many years, according to Rostislav Kapeliushnikov, a labour market expert.

Europe’s dependence on Russian supplied gas has drastically reduced. Nevertheless, several EU member states retain an interest in continued Russian exports given the steep costs of switching to alternative supplies. 

The number of educated and employed women in Russia is high by world standards. Russia is among the world leaders for the share of families with a woman as the main breadwinner. The weak role in governance and large pay gap are paradoxical, but have an institutional explanation.

In terms of concentration of wealth in the hands of a small group, 1% of the population, Russia is among the world’s leaders. This group is almost inaccessible for sociological analysis, but a few assessments can be made from open sources.

Many indicators point to a rise in economic uncertainty, but it is the news that reflects this trend most quickly. The index based on media archives has accurately shown all crises in the 21st century and made it possible to calculate their consequences for the economy.

The dynamics and geography of international capital flows are changing. Geopolitical risks have become the major driver of these flows.

After a period of record growth in 2022, gas spot prices in the European market have returned to the levels seen two years ago. Europe has managed to adapt to the reduction in supplies from Russia, but price volatility and consumption risks persist.

Entrepreneurship in Russia has shown great resilience to changes in the political and economic landscape: the influence of institutions and culture on business activity may persist even after extreme changes in political and economic conditions.

International sanctions have accelerated the transformation of the labour market which started during the pandemic. The market has moved from limited demand to limited supply, and this situation will persist for a long time, labor market expert Rostislav Kapeliushnikov says.

Global lenders are focused on financing development projects in good times. In times of crisis, they switch to stabilisation loans and become ‘firefighters’. This is the role being increasingly played by development banks, data from 11 countries of the Eurasian region show.

No one will argue that the financial sector affects the real one, but the number of answers to the question of how exactly it does so is almost the same as the number of economists. A problem arises in finding indicators that characterise this influence quite fully.

Gravity exists not only in physics, but also in economics, and just like in physics, its laws are objective. It is far more important for small and medium-sized economies to maintain and develop economic ties with the largest economies than vice versa.

Many Russian firms prioritise their market position over productivity growth; low competition and high entry barriers reduce their incentives for innovation. This approach extends the life of inefficient businesses whilst undermining the sustainability of efficient ones.

As one of the three winners of the 2022 Nobel Prize in economics, Ben Bernanke was awarded it for his research into the causes of the Great Depression. He learned and applied its lessons as chair of the US Federal Reserve when it had to combat the global financial crisis.

Demography is one of the factors influencing potential economic growth. Potential growth increases in tandem with the birth rate, which is closely linked to the increase in household income.

Transition to a low-carbon economy remains a priority for major countries including China despite the rises in commodity prices and the highest global inflation. For Russia, as its economy refocuses on Asian markets, the importance of the green transition still holds.

The index, developed by the Bank of Russia on the basis of surveys of enterprises, enables real-time assessment of the Russian economy and its sectors. It displays a high correlation with GDP, coming out in advance of it in terms of the timing of the publication of statistics.  

International sanctions have sparked a fundamental transformation in the Russian labour market, which may result in large-scale underutilisation of accrued human capital, notes Rostislav Kapeliushnikov, Corresponding Member of the Russian Academy of Sciences.

The Fed waited too long to tighten the policy in its anti-inflation stand, believing the acceleration of prices to have been temporary. The biggest concern for markets now is whether the Fed could avoid another policy mistake with regards to over hiking interest rates.

In March, the Russian economy entered a downturn phase triggered by the impact of all-out foreign trade and financial sanctions and restrictions. If they continue, the economy will lose some of its potential, and the recovery will be protracted.

It was by chance that David Card, the 2021 Nobel Prize winner, became an economist. Academic journals turned down his works, and his friends thought he had broken up the foundations of economic theory. But if a theory doesn’t fit the evidence, there must be an alternative theory.

There has never been such expensive gas in Europe as recently: over the 12 months up to the end of November, prices increased more than 5-fold. The situation raises the question of whether this crisis is temporary or it signifies structural problems in the energy markets.

Uber and Lyft once promised to replace personal cars and do away with traffic congestion. However, some municipal authorities believe that these services have only exacerbated traffic jams. Research shows that their impact on road traffic depends on the ‘design’ of cities.

Many researchers believe that the costs of hosting the Olympics are not recouped, and this is one of the reasons behind growing scepticism towards the Games. However, the Olympics often provided a stimulus to economies: it is all about how to take advantage of the Olympic legacy.

The rector of the New Economic School on what the features of the platform economy are, how competition leads to monopolization, what the reasons are behind the anti-platform crusade led by national regulators, and whether we should expect the world to become one big super app.

Russia will lag behind Europe, the United States and China in reducing greenhouse gas emissions from its power industry. Ensuring a reliable and affordable energy supply is of a higher priority in Russia than ecology, and natural gas matches both criteria.

The gender pay gap can be explained by many reasons. A data study on Russian graduates showed that the dominant reasons are segregation and self-selection of women in low-paid specialisations.

Inequality remains a sore point in socio-economic development, but society's key demands for justice have more to do with inequalities of opportunity such as equality before the law and equal access to healthcare and education, than with the elimination of income inequality.

Changes in private and social life caused by the pandemic have reignited scientific interest in gender inequality in the labour market. Russian economy has adapted to the crisis mainly through price adjustment, and this means the gender pay gap is likely to grow.

Experiments show that cats, monkeys, and deer can often ‘compose’ more profitable investment portfolios than those of professional investors. However, one should not rely on luck when investing.

Digitalisation is changing the payment market and consumer behaviour in many countries. This raises the question of whether it would be expedient to introduce an additional form of money that would meet the requirements of the digital age: a central bank digital currency.

The EU carbon tax on imports that is to be imposed in 2022 may affect almost 42% of Russian exports. The private sector and the state should take active measures to maintain economic competitiveness in the world of growing climate risks.

In Russia, returns to schooling are almost 50% lower than the global average: each additional year of schooling provides a relatively small increase in wages, which declines over time, World Bank experts have found.

Crises are a chance for countries to reassess their economic policies, proving that what used to be unquestionable is often a myth, says Esther Duflo, an MIT Professor and Nobel Prize winner.

Changing attitudes, aptitudes to reassess conventional ideas, and greater intellectual tolerance predetermined the Industrial Revolution and later, Europe turning into the world’s major economic centre, argues economist Joel Mokyr.

Capitalism is not driven by the selfishness and greed of the homo economicus but by decentralized decision-making that allows for experimenting and learning from one another, and the future lies with unity of purpose and mutual support, argues Paul Collier, professor at Oxford.

The languages people speak affect their worldviews and economic behaviour. Thinking in a foreign language helps people make more rational decisions.

Various indicators of the Russian labour market and their correlation with output show that there has been no record rise in overall unemployment due to the coronavirus shock, and given how things are going, there will be none.

Economics distinguishes inequality of outcomes and inequality of opportunity. The latter is both unfair and inefficient.

The unprecedented crisis will require fundamental changes in Russia’s fiscal policy. Financing anti-crisis measures will involve not only using the National Welfare Fund, but also moving away from fiscal rule and using unconventional fiscal and monetary tools.

The unconventional nature of the crisis requires unconventional measures. About one third of all jobs in Russia are at risk, and the main objective is to enable those who have lost their jobs and income to return to paid work quickly when the lockdown is lifted.

Most Russians believe that loans make their life tougher, but almost 50% of households have outstanding loans. Many borrow impulsively without regard to consequences, although the majority manage to pay them off.

Bad debts can be both a consequence of the borrower’s reduced financial circumstances and an instrument of unfair banking. Each of these problems has its regulatory solution but the key principle should be market responsibility of the owners and managers.

A sound banking system, a moderate bad debt level, prompt recognition of the problem which bad debts pose and dealing with them effectively, are essential preconditions of not only financial stability and depositor protection but also of economic growth.

Putting off an increase in the retirement age has cost Russia cuts in spending on development and increased pressure on the workforce. The next step is to estimate how much the budget will gain from the reform and to find the most effective way to use this money.

Non-commodity exports have slumped, and their fall can no longer be offset by oil and gas. Demand for Russia’s goods is decreasing as its trade partners’ growth slows.

The large-scale National Priority Project in housing has the potential to cause an accelerated increase in real estate prices, household debt, and banks’ credit risks. Moreover, explosive market growth could give way to a slump when the Project comes to an end.

Inflation targeting might support economic growth by lowering inflation and volatility. However, monetary policy alone cannot drive growth.