Real and Financial Economic Dynamics in Russia and Eastern Europe

by Lane, Timothy D.; Welfens, Paul J. J.; Oding, Nina; Welfens, Paul J. J.; Lane, Timothy D.; Oding, Nina

• ISBN13: 9783540009108
• ISBN10: 3540009108
• Format: Hardcover
• Copyright: 2003-11-01
• Publisher: Springer Verlag

Summary

Russia and many other transition countries are now facing the challenges of opening up, restructuring, and modernizing their economies, which requires addressing numerous institutional weaknesses and supply-side distortions. The papers in this collection examine these issues both in Russia and from a regional perspective, drawing on the experience of other reforming countries. Aspects addressed include the implications of trade and capital flows, the process of labor market reform, financial market development, productivity growth, and innovation dynamics. The dynamics of the reform process are also studied in the context of new political economy models.

Table of Contents

Introduction	1	(6)
Timothy Lane, Nina Oding and Paul J.J. Welfens
A. Capital Flows to Transition Economies: Reasons, Risks, and Policy Responses
Timothy Lane, Leslie Lipschitz, and Alex Mourmouras
1 Introduction	7	(1)
2 Capital Flows and their Motivation	8	(5)
2.1 Real Appreciations and Interest Rate Differentials	8	(2)
2.2 Capital Scarcity	10	(1)
2.3 What Limits Capital Flows to Transition Economies?	11	(1)
2.4 Risks Associated with Capital Inflows	12	(1)
3 Policy Responses to Capital Inflows	13	(5)
3.1 Exchange Rate Regime	14	(1)
3.2 Fiscal Policy	15	(1)
3.3 Structural Reforms	15	(1)
3.4 Capital Controls	16	(1)
3.5 Transparency	17	(1)
4 Conclusion	18	(1)
Appendix: Figures and Tables	19	(7)
References	26	(3)
B. Long Term Structural Change and Productivity Growth in Russia
Evgeny Gavrilenkov
1 Point of Reference	29	(3)
2 Strategy for Russia	32	(8)
3 Economic Growth and the Investment Climate	40	(3)
4 Efficiency, Competition, Institutions	43	(2)
5 Macroeconomics	45	(4)
6 Domestic Demand and Demographics	49	(4)
7 The Widening Technological Gap is a Threat to Russia's Future	53	(3)
References	56	(1)
C. Innovation, Growth and Wage Structure in Transforming Economies
Andre Jungmittag and Paul J.J. Welfens
1 Introduction	57	(2)
2 Innovation and Growth: Where do the Transition Countries Stand?	59	(7)
3 Learning by Exports: A Feasible Perspective	66	(5)
4 Learning from Asian NICs	71	(3)
5 Structural Change and Wage Structure in a Period of Economic Opening up and Growth	74	(3)
6 Conclusions	77	(6)
References	83	(2)
Appendix	85	(2)
D. Financial Sector and Human Capital in a Long-Term Growth Perspective: The Case of Russia
Ralf Wiegert
1 Introduction	87	(6)
2 The Importance of Financial Markets and Human Capital from Growth Theory Perspectives and Empirical Evidence	93	(16)
2.1 Financial Sector and Growth	93	(10)
2.2 Human Capital and Growth	103	(6)
3 Conclusion and Policy Options	109	(2)
Appendix	111	(4)
References	115	(4)
E. Structure and Growth of Private Consumption in Russia and East Germany
Cathleen Faber and Hans Gerhard Strobe
1 Introduction	119	(1)
2 Statistical Definitions of Private Consumption	120	(1)
3 General Factors Influencing Private Consumption	121	(2)
4 Structure and Growth of Private Consumption in East Germany	123	(5)
5 Final Consumption in Russia	128	(4)
6 Conclusions	132	(2)
References	134	(1)
F. Labor Market Transformation and Hidden Unemployment in Russia
Nina Oding
1 Introduction	135	(2)
2 The Main Features of the Labor Market	137	(3)
3 Employment! Unemployment Statistics in Russia	140	(4)
4 Hidden Unemployment	144	(1)
5 Enterprise Behavior and Employment Policy	145	(4)
6 The Case of St. Petersburg	149	(3)
7 Concluding Remarks	152	(1)
References	153	(2)
Appendix	155	(4)
G. Principles of Market-Oriented Labor Market Policies
John T. Addison
1 Introduction	159	(1)
2 The Case for Active Manpower Policy	159	(2)
3 Active Labor Market Policy in the United States	161	(3)
4 Evaluation of U.S. Employment and Training Programs	164	(5)
5 Interpretation of the U.S. Evidence	169	(4)
6 European Evidence	173	(3)
7 Concluding Remarks	176	(2)
References	178	(3)
H. Rent-Seeking and Rent-Setting: Government Versus Competition (The Case of St. Petersburg)
Andrei Zaostrovtsev
1 Introduction	181	(1)
2 Industrial Policy and Rent-Seeking	182	(2)
3 Rent-Seeking Through Social Merit	184	(1)
4 The Vesting of Monopoly Power	185	(2)
5 Licensing as Rent-Seeking	187	(3)
6 Protectionism	190	(2)
7 Conclusion	192	(1)
References	193	(2)
I. Powerful Groups and Corruption
Frank Bohn
1 Introduction	195	(1)
2 The Power Index Model	196	(8)
3 Conclusion	204	(2)
References	206	(1)
J. Regional Dimension of the Market Transformation in Russia
Ruslan Grinberg and Leonid Vardomsky
1 Introduction	207	(1)
2 Nonmarket Characteristics of the Russian Economic Space	207	(3)
3 Political and Economic Factors of Decentralization	210	(4)
4 Characteristics of the Economic Policy Pursued by Subjects of the Russian Federation	214	(2)
5 Some Results of Decentralization	216	(4)
6 A Change in the Federal Center's Position and Imperatives of the Regional Policy	220	(1)
7 Political Imperatives of Harmonizing Economic Relations between the Center and Regions	221	(6)
K. Foreign Trade Policies in Transformational Russian and Ukrainian Economies
Olga Nosova
1 Introduction	227	(1)
2 Global Capital Movements and Capital Flows	228	(6)
3 Foreign Trade Policies in Russia and Ukraine in Transition	234	(9)
4 Foreign Trade Policy Instruments	243	(4)
Appendix	247	(3)
References	250	(1)
L. The Role of Foreign Direct Investment in Transformation
Roland Doehrn and Natalja v. Westernhagen
1 Theoretical Background	251	(4)
2 Statistical Background	255	(4)
3 Determinants of FDI and Projections for Selected CIS and other Eastern European Countries	259	(5)
3.1. Determinants of FDI	259	(3)
3.2. Projections for Investigated CIS Countries and Eastern European Countries	262	(2)
4 FDI, Capital Formation, and Structural Change	264	(8)
4.1. The Size of Gross Fixed Capital Formation	264	(1)
4.2. The Contribution of FDI to Capital Formation	265	(4)
4.3. Sectoral Aspects	269	(3)
5 Conclusions	272	(1)
References	273	(2)
Appendix	275	(2)
M. Data Appendix	277
List of Figures	279	(4)
List of Tables	283	(4)
List of Contributors	287	(2)
Biographies	289