DOI: 10.32609/j.ruje.11.85599

Authors: Stanislav A. Rogachev, Yuri R. Ichkitidze

Abstract: We pioneer the estimation of technological progress parameters for Russia in the framework of the neoclassical theory. Implementing the CES production function (CES PF hereafter) as an instrument of output description, we construct a system of cointegrated time series which guarantee no spurious interpretations. Our analysis follows a logical transition from an aggregate to a sectoral level and is based on two convergent datasets of different length. For the aggregate economy most of our accepted models generally forecast a slight labor income share increase under capital-augmenting technical progress biased to labor. Selected models with structural break in 2008–2009 show below-unity elasticity of substitution between labor and capital. Sectoral estimates stand in support of labor income share (LS) growth across six of the eight analyzed economic sectors. We empirically illustrate the rule for LS direction in response to joint values of labor-to-capital elasticity of substitution and a combination of the relative factor intensity and the average growth rate of labor-to-capital ratio. The fact that the values of relative labor intensity in the Mining and Energy & Waste management sectors are less than the growth of labor-to-capital ratio provide no grounds for labor share rise. While our reduced-form evidence suggests that broad capital tax relaxations in these two sectors are unlikely to raise LS, this should be read as a hypothesis for future causal work rather than a policy prescription.

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DOI: 10.32609/j.ruje.10.105745

Authors: Tijani Forgor Alhassan, Eugenia Owusu Ansah, Shakizada U. Niyazbekova, Tatiana K. Blokhina

Abstract: This study outlines the features of financing investment development in Sub-Saharan African countries. Using the financial determinants of GDP, a model was developed based on the method of least squares employing data covering 2004–2018. It was revealed that a positive correlation exists between economic growth and bank loans as well as official development assistance. The results of the model indicate that bank loans and remittances significantly increase economic growth. However, both foreign direct investment and official development assistance (ODA) were found to be ineffective in promoting development, and this is attributable to its investment model (resource-seeking) and the conditions under ODA financing, respectively, in the region. Bank loans were found to be the most influential in promoting sustainable growth in the region. Hence, it is instructive that the reforms are needed and incentives are to be developed to improve the level of the region’s financial and banking sector development and facilitate the sustainable socioeconomic development of these economies.

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DOI: 10.1016/j.ruje.2017.09.003

Authors: Nadezhda Kosareva, Tatyana Polidi

Abstract: The article presents a new methodology for estimating gross urban product (the gross domestic product by city or metropolitan level) in Russia under extremely low statistical data availability about economy performance at the local level. These estimates provide new analytical instruments for assessing disparities in economic development between more than 1,000 Russian cities and other areas, and cities’ contributions to GDP as well as for comparing indicators of Russian cities with those of foreign countries.

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DOI: 10.1016/j.ruje.2016.02.001

Authors: Francesco Grigoli, Alexander Herman, Andrew Swiston, Gabriel Di Bella

Abstract: Output gap estimates are subject to a wide range of uncertainty owing principally to the difficulty in distinguishing between cycle and trend in real time. We show that country desks tend to overestimate economic slack, especially during recessions, and that uncertainty in initial output gap estimates persists several years. Only a small share of output gap revisions is predictable based on output dynamics, data quality, and policy frameworks. We also show that for a group of Latin American inflation targeters the prescriptions from monetary policy rules are subject to large changes due to revised output gap estimates. These explain a sizable proportion of the deviation of inflation from target, suggesting this information is not accounted for in real-time policy decisions.

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