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2024, Issue 1 (62). Abstracts


A.L. Mashkova, Orel State University named after I.S. Turgenev, Orel; Central Economics and Mathematics Institute, Russian Academy of Sciences, Moscow, Russia
A.R. Bakhtizin, Central Economics and Mathematics Institute, Russian Academy of Sciences, Moscow, Russia

Assessing consequences of global trade wars for world economies: Tools and forecasts

In the context of growing global political tension and establishing the world trade barriers, the urgent task is to develop the new tools for assessing their consequences. In this paper we present the agent-based model of trade wars, considering organizations in different countries generated using initial statistical data of the countries’ industries. Simulation determines changes in output and supplies of organizations under trade restrictions. Results of calculations on the developed model and comparison of various model complexes’ forecasts with real consequences of trade wars between the USA and China in 2018 and Western countries against Russia in 2022 are presented. Four scenarios were considered: (1) baseline, (2) new mutual restrictions between China and the USA, (3) more serious sanctions against China and Russia by the USA and the EU, (4) global trade war. In the second scenario deviation GDP of the USA and China from the baseline scenario does not exceed 0.5%. In the third scenario, the number of countries involved is expanding, and the fall in their GDP is expected at the level of 0.7–1.0%. In the fourth scenario, the entire world economy experiences a serious slowdown, and the EU countries are facing the most severe consequences, going into recession.

Key words:  agent-based model; trade wars; scenario calculations; sanctions; industries
JEL classification: F478

N.S. Avkhimovich, HSE University, Moscow, Russia

Should the strongest be the last? Strategic choice of ordering in sports relays

In this paper, we analyse the strategic order of athletes in sports relays. It is generally believed that the strongest athlete should perform the last. In sports, ‘choking under pressure’ is a major phenomenon that manifests in athletes’ performance decrement when faced the stressful conditions. We focus on the pressure the athletes experience when their team is lagging behind the competitor in accuracy-based relays. In theoretical models, we found that choking under pressure has an impact on strategic decisions on team formation when teams consist of players with differentiated skills. Without ‘choking under pressure’, teams are indifferent to athletes’ order. If all athletes experience the same magnitude of performance decrements, the strictly dominant strategy is: a stronger athlete starts and a weaker athlete finishes the race. For the case of differentiated performance decrements, we find the optimal strategy as a function of those decrements. The conventional wisdom strategy “Weaker to start, stronger to finish” is strictly dominant only when the resilience of a strong player is high enough and the performance decrement is much lower than a weak player’s.

Key words: choking under pressure, relay races, strategic athletes’ ordering, team formation
JEL classification: C61, C70, L83

D.A. Kirpishchikov
, HSE University, Perm’, Russia

Board of directors’ social capital as factor of companies’ resilience to exogenous shocks

The main goal of this paper is to determine the impact of boards of directors’ social capital on the companies’ resilience to exogenous shocks. The study explores social capital formed by various types of connections: professional, international, and political. The data of the largest non-financial companies in Russia, which shares were included in the Moscow Exchange Broad Market Index, covers the period from 2007 to 2020. It allows analyzing the global financial crisis of 2008–2009, the commodity crisis and sanctions in 2014–2015, and the crisis caused by the COVID-19 pandemic in 2020. The empirical results of least-squares estimation of fixed-effects models show the different influences on the companies’ resilience of the considered connections during the crises. The results show a persistent negative impact of these crises, except the one caused by the COVID-19 pandemic. The social capital of board members has a different influence on the companies’ resilience during these crises. Professional ties decreased the negative effect during the global financial crisis. Professional and political connections strengthened the negative impact on companies’ resilience during 2014–2015. Thus, the nature of the crisis plays an important role.

Key words: social capital, companies’ resilience, crisis, board of directors, directors’ connections, network analysis
JEL classification: G30


A.V. Bakaykina, Moscow City Strategic Development Agency, Moscow, Russia

Determinants of SME support participation in the Russian two-tier system

This article analyzes the factors influencing the participation of SMEs in the second-tier support mechanism, under which state banks provided end recipients with soft loans, partial guarantees and a hybrid instrument (100% guarantee with preferential funding from the Bank of Russia). The existing research literature predominantly considers the one-tier mechanism of state support, while the issues of functioning of the two-tier system remains understudied. Taking into account the peculiarities of the examines’ support mechanism, the set of factors influencing the participation of companies in support programs was largely reconsidered. For quantitative assessment a classical logit model was used, however, taking into account the presence of "rare events" in the data structure, regressions were re-estimated using two modifications (relogit, firthlogit). The analysis showed that state banks in general have low incentives to serve new clients and use alternative lending technologies. At the same time, the mechanism of state support itself requires significant adjustments.

Key words: two-tier support of SME, hybrid instrument, subsidized loans, guarantees, state-owned banks, development financial institutions, SME Corporation, SME Bank, RGO
JEL classification: G21, G23, G28, H81


N.S. Kalinin, Guangdong Technion — Israel Institute of Technology, China
A.D. Kuz’mina, Yandex, Moscow, Russia and HSE University, Saint Petersburg, Russia (International Laboratory of Game Theory and Decision Making)

What could be a dynamical centralized college admission system in Russia

University admission process in Russia was quite risky for college entrants in 2021–2022. Many participants could not be sure that they are admitted to a program until the very end of admission process. In this policy paper, we describe a dynamic version of the Gale–Shapley algorithm and study its rate of convergence. The proposed model of admission system imposes no risks on participants after they compose a preference list of universities. So, participants can decide where to submit their applications relying on their true preferences. Each participant may be sure that she/he will be proposed a place in a particular university before the other participants with lower grades. For a practical realisation the rate of convergence of an admission algorithm is very important. We provide analysis of a modelling of the proposed algorithm on a synthetic data and discuss what may be the problem cases in real life implementation and how to guarantee faster convergence in these cases.

Key words: education, university admission, Gale–Shapley algorithm, mechanism design
JEL classification: C78, D71, D82


D.V. Skrypnik, Central Economics and Mathematics Institute, Russian Academy of Sciences, Moscow, Russia

Infrastructure and economic growth in the context of the evolutionary theory of economic policy

The paper examines the question of whether large-scale investments in infrastructure that are not directly related to production development projects are effective? Efficiency refers to accelerating economic growth on a sustainable basis. A review of research results shows that the effects on economic growth of these investments are of a complex, nonlinear nature, which is due to the evolutionary nature of the effectiveness of investments in infrastructure. Application of the approach of evolutionary economic policy, which assumes the dependence of economic policy on the stage of development of the country, allows us to substantiate the following hypothesis. A significant impact of infrastructure on growth is found for countries that are far behind (the direct channel predominantly works — increasing the productivity of existing factors), where there is a critical lack of infrastructure. In this case, investments in infrastructure can outstrip the dynamics of the economy, contributing to its acceleration. As infrastructure capital accumulates, its return decreases, and the efficiency of the government and the market is at a low level. In this case, the influence of infrastructure is weak if the country tries to rely on the institutions of a developed market, and strong if the country relies on the institutions of catching-up development. In the first case, it is optimal for the infrastructure to follow the development of the economy, in the second — to lead. As the country develops, the efficiency of the market and government increases, and as a result, the work of the complementarity channel improves (when there is an influx of new private capital). This channel is focused on new projects, territory development, creation of new or modernization of existing production facilities. In addition, a more effective government is better at identifying and eliminating development bottlenecks. Investments in infrastructure can again outpace economic dynamics, ensuring its growth. For the Russian economy, where the efficiency of the government and the market, the supply and quality of infrastructure and human capital are at average levels, and there are not enough production development projects, one cannot expect accelerated growth from investments in infrastructure.

Key words: infrastructure, economic growth, evolutionary theory, economic policy
JEL classification: E62, H50, H54, O23, O43


V.V. Mironov, “Development Center” Institute of the HSE University, Moscow, Russia
A.O. Kuznetsov, “Development Center” Institute of the HSE University, Moscow, Russia
L.D. Konovalova, “Development Center” Institute of the HSE University, Moscow, Russia

On the sectoral effects of digitalization based on new indicators by type of economic activity

The article is devoted to the problem of quantifying the sectoral effects of digitalization of the economy. The experience in assessing the impact of digital transformation on economic growth is described. A methodology for assessing the sectoral effects of digitalization was proposed and tested on a panel of industrialized economies. It is based on the modified OECD approach, which was previously used by international experts and the Ministry of Economic Development of Russia at the macro level. This approach assumes econometric estimates based on panel regressions of the impact of the dynamics of economic policy indicators (including digitalization) on the components of a specially disaggregated production function. The key advantage of this approach is that it represents GDP growth (in our approach, sectoral output) as the sum of separate and independent components of the supply (capital intensity of output, labor force involvement and total factor productivity (“TFP”)). This approach allows you to first assess the effect of digitalization on each component separately, and then, integrating the estimates obtained with certain weights and summing up with the contribution of “TFP”, determine the overall impact of digitalization on the output growth. The transition to the sectoral level in assessing effects was made possible by the recent inclusion of sectoral digitalization indicators in the EU KLEMS database for 40 types of economic activity of 30 countries in the period 1995–2019. The preliminary estimates of the impact of digitalization on the growth of branches of economy output obtained during testing (for 10 selected sectors) allow us to note a serious differentiation of effects by branches of economy, as well as to point out some opportunities to enhance the effectiveness of economic policy in Russia taking into account some characteristics of the structure of its economy.

Key words: digital transformation, economic structure, advanced technologies, production function, economic policy
JEL classification: E20, E23, E26, E66, C54

V.S. Vinogradova, HSE University, School of Finance, Moscow, Russia

The upside-down world of value capture. Do companies in technology sector follow the principles of profitable growth?

The technology sector has been showing a constant increase in the number of M&A transaction over the last years, setting record in both deal volume and value. For many companies, this is the only way to obtain the unique resources and build capacity necessary to succeed in the fast-paced business environment. The current paper investigates whether the strategic deals, which have been driving the technology sector over the last decade, can be considered value-creating and had a positive impact on the acquirers’ long-term financial performance. To analyze the changes in the performance of bidding companies both univariate and multiple-regression analyses were performed. The results show that overall the acquiring companies could not achieve profitable growth and fully capture value and the benefits of M&A. The acquirers showed rather a deterioration in post-acquisition profitability, efficiency, and growth. The focus (international and industrial) was associated with the best results in terms of both profitability and growth, while the largest increase in post-event growth rates was achieved by the companies from the emerging markets and in the first years following the completion of the deal.

Key words: growth strategy, technology sector, corporate M&A, profitable growth, shareholder value creation, valuation

JEL classification: G14, G32, G34


V.Ye. Zyamalov, Russian Presidential Academy of National Economy and Public Administration (RANEPA), Moscow, Russia
M.Yu. Turuntseva, Russian Presidential Academy of National Economy and Public Administration (RANEPA), Gaidar Institute for Economic Policy, Moscow, Russia

The influence of goods’ quality on their price indices

This paper provides an example of applying the hedonic method of adjusting price indices that takes into account the impact of changes in the quality of goods on their consumer price. With first attempts to apply dating back to the beginning of the XX century, and being finally formalized by Griliches in 1961, the method allows us to divide the observed price change into a part determined by inflationary processes and a part associated with changes in consumer qualities of goods. In foreign literature, the method has received wide coverage; it has been applied to the prices of a wide variety of goods: from consumer electronics to air tickets in the US. Currently, the method is often used to study the real estate market. At the same time, in the Russian literature there are relatively few works considering this method. In this paper, the authors attempted to apply the method to prices of consumer electronics (laptops) and used cars. Also, the authors present updated results from previously published works related to mobile phones and TVs. The application of the method showed that it allows obtaining adjusted values of price indices that ate significantly different from simple observable prices index.

Key words: consumer goods, price indices, hedonic method, quality characteristics, inflation
JEL classification: E20, E23, E26, E66, C54


S.A. Andryushin, Institute of Economics, RAS, Moscow, Russia

Interest rate policy of the Bank of Russia in conditions of fiscally-dominant regime: Risks and prospects

The monetary policy of the central bank is considered in two regimes: the monetary-dominant regime and the fiscally-dominant regime. The article shows the reasons and conditions for the transition of central banks to monetary policy following the dominant fiscal regime. This transition allows the central bank to include fiscal components in its monetary policy that affect the rate of inflation, the dynamics of real interest rates, the state of the primary budget deficit/surplus, the cost of servicing government and corporate debt, and the rise/decrease in long-term bond yields. Under the dominant fiscal regime, the central bank must first lower real interest rates, which can reduce the cost of servicing public debt. The central bank must keep the debt (relative to GDP) at a level at which price increases in the economy are always relative to the real cost of servicing the public debt or the present value of taxes collected minus all budget expenditures. The central bank can reduce inflation by redistributing real payments across the maturities of government debt. Risks of the fiscally-dominant regime arise as a result of erroneous monetary policy and the absence of the necessary fiscal components in the macroeconomic forecast of the central bank.

Key words: public debt, monetary policy, inflation, interest rate, monetary-dominant regime and fiscally-dominant regime, fiscal policy, fiscal risks, central bank
JEL classification: E31, E47, E58, E69


E.P. Dobronravova, Russian Presidential Academy of National Economy and Public Administration (RANEPA); Lomonosov Moscow State University, Moscow, Russia
P.V. Trunin, Russian Presidential Academy of National Economy and Public Administration (RANEPA); Gaidar Institute for Economic Policy, Moscow, Russia

International monetary policy transmission in EAEU countries

The paper presents the analysis of the channels and potential impact of Russian monetary policy on the economies of Eurasian Economic Union members. Theoretical literature highlights three key groups of international transmission channels: international trade, migration of labor and financial channels. Our research demonstrates the significant impact of monetary policy shock in Russia on the economies of EAEU. International trade channel stands out as a key transmission channel: monetary tightening in Russia leads to the decrease in economic activity in the member states as a result of the reduction in exports of those countries, while currency depreciation, expected by economic theory, was not detected. Despite of synchronization of the interest rates, we couldn’t find much evidence of high capital mobility between EAEU countries, which is the main precondition on the efficiency of financial channels of international monetary transmission. This leads to the conclusion that such behavior of interest rates might occur due to the common inflationary pressures, associated with business-cycles synchronization, strengthening of mutual trade and long-term investment.

Key words: monetary policy, cross-border monetary spillovers, international monetary transmission, economic integration, Eurasian Economic Union (EAEU)
JEL classification: E52, E58, F02, F15, F36


V.O. Grishchenko, Bank of Russia, HSE University, Moscow, Russia
A.A. Sinyakov, Bank of Russia, Moscow, Russia

Demography and equilibrium interest rates: Competing approaches and evidence from Russia

We consider two approaches to estimate the impact of demographics on short- and long-run equilibrium interest rates. Under the traditional approach, the equilibrium rate is determined by the dynamics of ‘real’ variables, and demographic factors affect the long-term equilibrium rate through the balance between savings and investment. The observed global decline in real rates is partly explained by the demographic trends: slowdown in population growth and its aging. According to the macro-financial approach, which was actively developed in recent years by researchers of the Bank for International Settlements, the traditional view overestimates the extent of the decline in (real) equilibrium rates. The proponents of the macro-financial approach believe that, given the financial cycle, the decline in long-term equilibrium rate is less pronounced, as it is mainly driven by monetary policy regimes rather than by ‘real’ factors. Moreover, the mentioned demographic trends affect the financial cycle as well, so they indirectly affect short-term equilibrium (neutral) rates according to the macro-financial approach as well. Historically, for Russia, as a major energy exporter, the factors of the real economy (and thus the traditional approach) are more important. As the financial sector develops, the macro-financial approach becomes more relevant. Nevertheless, the estimates of the dynamics of the long-term equilibrium rate within the framework of both traditional and macro-financial approaches for Russia will be close to each other.

Key words: equilibrium rate, neutral rate, natural rate, life cycle, savings, investment, money neutrality, financial cycle
JEL classification: E40, E50, J11


O.K. Shibanov, New Economic School (NES), Program “Master of Arts in Finance”, Moscow, Russia

Lessons for the central banks: Inflation in 2021–2023

The world inflation in 2021–2023 was unexpectedly high — and that was the most serious global inflation episode after the oil shock of 1970th. The response of the Central banks (CB) was to increase interest rates, and by the end of 2023 inflation has hampered. Yet CBs had to accept that they made a number of errors — namely, too late start of the rate rising (in the US and EU — from the Spring of 2022), inaccurate inflation modelling, and too strong expectations of possible recession. I show how the literature thinks about the contribution of supply and demand factors into inflation in the US, EU and Russia. The speed of CB reaction to higher price increase is estimated, several steps for the CBs are valuated. The main ones — use more distinct models, react fast to the inflation processes, and do not ignore historic data that might seem outdated.

Key words: inflation, Central banks, forecasting models, monetary policy
JEL classification: E00, E31, E52, E58


A.N. Meshcheryakov, Bank of Russia, Monetary Policy Department, Moscow, Russia
A.A. Sukhomlinov, Bank of Russia, Monetary Policy Department, Moscow, Russia

Considerations regarding inflation target levels

Most studies on the optimal level of the inflation target point to the necessity for the central bank to maintain full price stability in the economy. At the same time, global experience of inflation targeting, as well as diverse communication of central banks indicate the heterogeneity of inflation target levels and a variety of factors behind their choice. This paper considers a wide range of approaches to determining the most appropriate level of the inflation target for the economy. The systematization of the global practice and theory of monetary policy, as well as the results of the Bank of Russia’s Monetary Policy Review, indicate significant benefits of a potential lowering of the inflation target level in Russia in the future from the current 4%. However, as the Bank of Russia officially communicates, an assessment of the feasibility and timing of lowering the inflation target is possible after inflation stabilizes near 4% and general economic uncertainty is reduced.

Key words: inflation target level, inflation target, inflation targeting, monetary policy
JEL classification: E31, E42, E50, E52, E58


New Economic Association