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Intergenerational Mobility of Russian Households

To understand the nature of income inequality one needs to know how persistent the inequality is across generations. The same inequality levels could conceal different intergenerational mobility. We utilize the Russian Longitudinal Monitoring Survey (RLMS-HSE) to find out how large intergenerational mobility in Russia is...
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To Commemorate the 1917 Revolution in Russia – Occasions More for Reflections than for Celebrations

The centennial of the 1917 revolution in Russia provide opportunities for the public to refresh knowledge of the tumultuous events that dramatically changed the country’s history. Conferences, television series and debates, exhibitions at historical and art museums are some of the activities that will illuminate...
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Trade Preferences Removal – The Case of Belarus

How does the removal of trade preferences influence the exports of the affected country? We study this question on the example of Belarus’ loss of trade preferences granted by the EU to developing countries. Our brief argues that trade preferences are most important for simple...
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Too High or Too Low? The Pros and Cons of Regulating the Reserve Price in Public Procurement in Russia.

In theory, an optimally set reserve price leads to an optimal outcome in all standard auctions. In reality, however, it is difficult to identify the optimal reserve price. In public procurement auctions, a higher reserve price may lead to a higher competition for the contract,...
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Higher Competition in the Domestic Market – A Way to Boost Aggregate Productivity

Competition is a good thing not only because of lower prices and larger variety. Higher competition in the domestic market also shifts necessary labour and capital resources from less productive domestic-oriented firms to export-oriented productivity champions. Such firms will make better use of production factors...
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Do Regional Ties Add to Depositor Trust during the Crisis? Evidence from Russia

The question of whether regional banks should be treated differently has recently become all the rage in the banking authorities’ debates in Russia. We add to this discussion by analyzing bank regional ties in the flight-to-familiarity context, which implies that agents naturally feel more favorable...
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Gaming the System: Side Effects of Earnings-Dependent Benefits

Today policy makers in developing and middle-income countries face tremendous challenges in combating various forms of tax evasion. Increasingly it is proposed to tie social security benefits to the reported income and in this way increase tax compliance incentives. We use administrative data from Latvia...
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The Economics of Russian Import Substitution

This policy brief discusses the economic mechanisms triggered by import substitution policies, associated losses and conditions that ensure positive economic effects. Numerical estimations of potential effects of Russian import substitution policies indicate a decline in GDP, decrease in output of unprotected sectors and consumers’ welfare...
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Does Product Market Competition Cause Capital Constraints?

At the very center of Schumpeter’s (1934, 1942) notion of creative destruction is firms’ access to bank capital, which helps to fund the innovation in competitive product markets that drives out less productive firms in favor of those with more profitable ideas. However, competition is...
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What Does Ukraine’s Orange Revolution Tell Us About the Impact of Political Turnover on Economic Performance?

Political turnover is a normal, even desirable, feature of competitive politics, yet turnover in a context of weak institutions can create policy uncertainty, disrupt political connections, and threaten the security of property rights.   What is the impact of political turnover on economic performance in such...
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Spatial Wage Inequality in Belarus

This policy brief summarizes the results of an analysis of wage inequality among the districts of Belarus over the period 2000-2015. The developments in wage inequality varied noticeably by sub-periods: wage disparity decreased in 2000-2005, stayed stable in 2006-2012, and increased again during the last...
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Expanding Leniency to Fight Collusion and Corruption

Leniency policies offering immunity to the first cartel member that blows the whistle and self-reports to the antitrust authority have become the main instrument in the fight against cartels around the world. In public procurement markets, however, bid-rigging schemes are often accompanied by corruption of...
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And the Lights Went Out – Measuring the Economic Situation in Eastern Ukraine

This policy brief assesses the economic situation in the war-affected East of Ukraine. Given that official statistics are not available, we use changes in nighttime light intensity, measured by satellites, to estimate to what extent the war has destroyed the economy, and whether any recovery...
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Effects of Trade Wars on Belarus

The trade wars following the 2014 events in Ukraine affected not only the directly involved participants, but also countries like Belarus that were affected through international trade linkages. According to my estimations based on a model outlined in Ossa (2014), these trade wars led to...
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Time to Worry about Illiquidity

At a time when central banks have injected unprecedented amounts of money, worrying about illiquidity may appear odd. However, if poorly understood and unaddressed, illiquidity could be the foundation of the next financial crisis. Market liquidity is defined as the ease of trading a financial...
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Is Local Monetary Policy Less Effective When Firms Have Access to Foreign Capital?

Central banks affect growth in part by raising or lowering the cost of investment through their influence over local interest rates. We examine whether the ability of local firms to raise money abroad reduces the influence of local monetary policy authorities. Surprisingly, it does not....
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Highly Educated Women No Longer Have Fewer Kids

This policy brief summarizes evidence that the cross-sectional relationship between fertility and women’s education in the U.S. has recently become U-shaped. The number of hours women work has concurrently increased with their education. The theory that the authors advance is that raising children and home-making...
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Strategic Aid Financing

Donor countries often face a Samaritan’s dilemma when trying to implement political conditionality in bilateral aid. Giving through multinational organizations can mitigate this problem: Recipient nations are de-facto competing for funds, which restores their incentives to comply even with non-enforceable conditions. Donor nations might therefore...
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Examining Social Exclusion among the 50+ in Europe – Evidence from the Fifth Wave of the SHARE Survey

Authors: Michal Myck and Monika Oczkowska, CenEA. Though intuitive, the concept of social exclusion is complex and hard to measure. Recently, however, we have witnessed policymakers and international institutions increasingly pay attention to better understand material and social distress and to identify the means to...
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Environmental Implications of Russia’s Accession to the WTO

Authors: David G. Tarr, NES and Natalia Turdyeva, CEFIR. We investigate the environmental impacts of Russia’s World Trade Organization (WTO) accession with a computable general equilibrium model incorporating imperfectly competitive firms, foreign direct investment and endogenous productivity. The WTO accession affects CO2 emissions through technique...
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Leniency, Asymmetric Punishment and Corruption: Evidence from China

Authors: Maria Perrotta Berlin and Giancarlo Spagnolo, SITE. Since coming into office two years ago, Chinese President Xi Jinping has carried out a sweeping, highly publicized anticorruption campaign. Skeptics are debating whether the campaign is biased towards Mr. Xi’s rivals, and even possibly related to...
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Urban Land Misallocation and Markets in Russian Cities

Authors: Paul Castañeda Dower, CEFIR and William Pyle, Middlebury College. Former socialist countries inherited factory-dominated cityscapes since planners made industrial location decisions in relative ignorance of land’s opportunity costs. Drawing on unique survey evidence and policy variation across territorial units within Russia, this brief discusses...
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Evaluating the Political Man on Horseback – Coups and Economic Development

Author: Erik Meyersson, SITE. In a new paper (Meyersson, 2015) I examine the development effects of military coups. Coups overthrowing democratically elected leaders imply a very different kind of event than those overthrowing autocratic leaders, and these differences relate to the implementation of authoritarian institutions...
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New Light on the Eastern Front – Contributions from Russia to the 70th Anniversary of the Victory in Europe in World War Two

Author: Lennart Samuelson, SITE. Interesting results of the post-Soviet research on the Second World War are now presented in 12 imposing volumes, Velikaia Otechestvennaia Voina 1941 –1945 (Great Patriotic War 1941–45) written by specialists in military, political, international and economic history. Each chapter reflects the...
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Export Costs of Visa Restrictions

Authors: Natalia Kapelko and Natalya Volchkova, CEFIR. We study the role of visa restrictions in determining export flows between firms and countries, and find a significant negative impact of visa restrictions. Our results indicate that visa costs not only diminish the value of export, but...
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Did the Fertilizer Cartel Cause the Food Crisis?

Authors: Hinnerk Gnutzmann, Catholic University of Milan, and Piotr Spiewanowski, Polish Academy of Sciences. Food prices escalated during the 2007/2008-food crisis and have remained at historically high levels since. We show that an international export cartel for fertilizers was an important driver of the crisis,...
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Who Cheats on a Cartel Agreement?

Author: Catarina Marvão, SITE. Leniency policies, widely used by antitrust authorities, aim to deter and dissolve cartels by granting a fine reduction (up to immunity) to reporting cartel members. What are the characteristics of the reporting cartel members? Marvão (2014) addresses this question by developing...
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Fiscal Decentralization and Budget Discipline in Russian Regions

Authors: Michael Alexeev, Indiana University, Nikolay Avxentyev and Arseniy Mamedov, Russian Academy of National Economy and Public Administration. We use panel data from the Russian regions for 2005-2013 to estimate the link between intraregional fiscal decentralization and regional budget deficits. Although Russian regions are not...
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The Political Economy of the Latvian State Since 1991: Some Reflections on the Role of External Anchors

Author: Alf Vanags, BICEPS. This brief discusses the role of external anchors or goals such as WTO accession, NATO and EU accession in Latvia’s development strategy since 1991. On the one hand the external goals ‘depoliticised’ many potentially contentious areas of Latvian life. On the...
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Crisis and Trust

Authors: Maxim Ananyev and Sergei Guriev, CEFIR Our research uses the 2008-2009-crisis experience in Russia to identify the relationship between income and trust. In 2009, Russian GDP fell an 8-percent drop in 2009. The impact of the crisis was very uneven among Russian regions because...
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Growing Inequalities in Workplace Amenities

Authors: Olena Nizalova, University of Kent, IZA, Kyiv School of Economics and Nataliia Shapoval, Kyiv School of Economics. Inequality is considered to be a serious detrimental factor for societies’ development. It has been shown to undermine the health of the population, cause civil unrest, and...
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Equity and Efficiency in the Latvian Tax-Benefit System

Authors: Anna Zasova and Anna Zdanovica (BICEPS). There is a trade-off between two major objectives of a tax-benefit system: equity and efficiency. The tax-benefit systems that redistribute a lot of income tend to generate disincentives to work. The tax-benefit systems that create good incentives to...
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Effects of International Taxation on Firm Valuation: Evidence from Japan’s 2009 Tax Reform

Authors: Sebastien Bradley and Estelle Dauchy, Drexel University and New Economic School. This brief highlights the results of a study of Japan’s 2009 adoption of a territorial tax regime exempting corporations’ foreign earnings from domestic taxation. We examine stock market reactions to events leading to...
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How Transport Links Help Market Integration: the Case of Moscow Office Rental Market

Authors: Anna Ignatenko (University of California, Davis), and Tatiana Mikhailova (RANEPA) This brief is based on a research project on Moscow office real estate (Ignatenko & Mikhailova, 2014). We study the market for office space rentals in Moscow. Our main interest regards spatial competition: when...
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The Relationship between Education and Migration. The Direct Impact of a Person’s Education on Migration

This brief is based on a section from a large policy report, which investigates to what extent education directly influences major migration decisions. The results indicate that education does not have a clear and persistent effect on most of the migration decisions of Ukrainians —...
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More Commitment is Needed to Improve Efficiency in EU Fiscal Spending

Author: Jenny Simon, SITE. The member states of the European Union coordinate on many policy areas. The joint implementation of public good type projects, however, has stalled. Centralized fiscal spending in the European Union remains small and there exists an overwhelming perception that the available...
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Whither Russia’s History Thought? Trends in Historical Research, Teaching and Policy-Making

Author: Lennart Samuelson, SITE. The next Russian generation’s understanding of their country’s past may turn out to be more refined and complex than at present whether or not the current project of a single history-textbook and accompanying pedagogical materials are successful. Rather than imposing a...
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Financial Support for Families with Children and Its Trade-Offs: Balancing Redistribution and Parental Work Incentives

Authors: Michal Myck, Anna Kurowska and Michal Kundera, CenEA. Reforms of tax-benefit system of financial support for families with children have a broad range of consequences. In particular, they often imply trade-offs between effects on income redistribution and work incentives for first and second earners...
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The Arab spring logic of the Ukrainian revolution

Authors: Dmitry Dagaev, HSE, Natalia Lamberova, University of Maryland, Anton Sobolev, University of California-LA, and Konstantin Sonin, HSE and CEFIR Motivated by the unusual patterns and dynamics of the Arab Spring, we construct a model explaining the vulnerability of the newly established incumbent to popular...
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