DOI: 10.32609/j.ruje.12.118859

Authors: Angelina E. Shpilevaya, Mikhail Y. Gareev, Kristina V. Nesterova, Andrey V. Polbin

Abstract: This paper presents a dynamic overlapping generations general equilibrium model for the Russian economy to assess the economic and fiscal effects of the 2018 pension reform, which raised the statutory retirement age. The model incorporates realistic demographic projections, variable labor supply responses, and exogenous scenarios for oil prices. It evaluates the impact of the reform across a range of future demographic and external conditions by comparing post-reform trajectories of macroeconomic aggregates, public deficits, and tax rates with baseline scenarios without reform. The results show that raising the retirement age moderately reduces consumption in the short run but leads to more robust growth in output, investment, government spending, and exports in the long term. Pension reform improves fiscal sustainability by lowering the required budget-balancing VAT rate and pension fund deficit, especially under adverse demographic conditions or low oil prices. The fiscal effect of reform is muted in optimistic demographic scenarios with strong labor force growth, but remains significant when population aging intensifies fiscal pressure. These findings highlight the importance of structural reforms for long-term macroeconomic stability and underscore the critical role of demographics and external shocks in shaping pension system performance.

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DOI: 10.1016/j.ruje.2016.02.002

Authors: Evsey Gurvich, Ilya Prilepskiy

Abstract: This paper examines the impact of the current Western financial sanctions on the Russian economy. Modeling the capital flow components (accounting for the influence of other factors, including falling oil prices) reveals that sanctions have directly affected sanctioned state-controlled banks, oil, gas and arms companies by severely constraining foreign funding and have indirectly affected non-sanctioned companies by reducing inflows of foreign direct investment and causing funding conditions to deteriorate. The overall negative effect on gross capital inflow over 2014–2017 is estimated at approximately $280bn. However, the effect on net capital inflow is significantly lower ($160–170bn) due to Russian companies’ self-adjustment, which is evidenced by their utilization of foreign assets accumulated earlier for debt repayment and an overall decrease in gross capital outflow. The sanctions’ estimated effect on GDP is significant (–2.4 p.p. by 2017, compared with a hypothetical scenario with no sanctions) but 3.3 times lower than the estimated effects of the oil price shock.

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