The initial post-soviet union period has brought Russia a longest path towards expected economic growth, much of which are explained by external factors. The paper applies the neoclassical economic growth theory to the Russia’s economy during 1990-2013, explaining the importance of foreign oil price changes, inflow of migrants and its geostrategic location towards global trading - including arm sales to notorious North Korea and Iran - to its annual output growth. I also explained the relative correlations between domestic, internal variables, such as changes in legislation/tax reformations, savings and the growth rates achieved periodically for comparative reasons. Future forecasts approved that the growth has been stabilized in a near-term and will become increasingly more depended on the number of Central Asian and other area migrant workers as long as the negative spread between birth and death rates hold in the long-term. And investment in IT industry and attracting foreign hi-tech investments are highly recommended to increase the factor productivity and lessen the oil dependency in the long term. A regression results on the Cobb-Douglas production function also proved our findings by putting more prominence on labor and technology, as the abundance of natural resources, capital, barely reaches increasing returns to scale. I also found that the regression on constant GDP to the oil production and oil prices asserted that more than two third of variations in output could be the reflection of the variations in oil prices.
Table of Contents
INTRODUCTION
LITERATURE REVIEW
EXOGENOUS GROWTH THEORY
DATA SOURCE AND DESCRIPTION
MODELLING
REGRESSION RESULTS
IMPULSE RESPONSE FUNCTION
CONCLUSION
Research Objectives and Themes
This research paper examines the economic growth of Russia during the post-Soviet period from 1990 to 2013 by applying the neoclassical exogenous growth model. It seeks to determine the influence of external factors, such as global oil prices and migration, on Russia's annual output, while exploring how domestic policy reforms and internal variables correlate with long-term economic stability and future development potential.
- Application of neoclassical growth theory to the Russian economy.
- Evaluation of the impact of oil production and global oil price volatility on GDP.
- Analysis of the role of labor productivity, capital formation, and technological progress.
- Forecasts for future growth based on regression models and impulse response functions.
Excerpt from the Book
Exogenous Growth Theory
Exogenous growth model explains the state of the economic growth by considering capital, labor and factor productivity (technological progress, labor and capital productivity, population growth) (Solow, 1956). There are numerous key assumptions of the model. The first one is the existence of diminishing return of capital when everything else is constant. Unlike this feature, most classical economists puts forward two theories: rate of profit could be decreasing because of the competition arisen or increasing because of the productivity measures achieved in labor division (Barro, 2008). The second one is now when the only variable that is not fixed is labor, and any growth in the number of labor force will result in a slight growth for a short period, and over time comes back to its steady state, making zero changes in GDP per capita (Blanchard, 2010). Now, if the factor which can be varied is technological progress, per capita output will keep up the same pace as the IT progress (Solow, 1957). To conclude, the model specifies that in the long run the economy will come back to its steady growth rate factors on its own, even if positively affected by government policies such tax abatement or investment subsidizing in the short run.
Summary of Chapters
INTRODUCTION: This chapter provides an overview of Russia's transition from the Soviet regime to a market-based economy and outlines the research objective of analyzing growth-contributing factors.
LITERATURE REVIEW: This section discusses the historical context of Russia's economic reforms, the impact of privatization, and previous scholarly research regarding the influence of natural resources on growth.
EXOGENOUS GROWTH THEORY: This chapter introduces the theoretical framework of the neoclassical model, focusing on the roles of capital, labor, and technology in driving long-term economic output.
DATA SOURCE AND DESCRIPTION: This section details the methodology used to collect and process economic data from IMF and World Bank databases for the period 1990–2013.
MODELLING: This chapter outlines the specific econometric models employed, including regression analysis and the Cobb-Douglas production function, to evaluate the Russian economy.
REGRESSION RESULTS: This chapter presents the empirical findings regarding depreciation, population growth, and the calculated relationship between capital, labor, and output.
IMPULSE RESPONSE FUNCTION: This section analyzes the dynamic response of economic variables to shocks, using the impulse response function to predict the effects of labor force changes.
CONCLUSION: The final chapter summarizes the findings and provides policy recommendations, emphasizing the need for investment in IT and education to reduce oil dependency.
Keywords
exogenous growth theory, neoclassical growth model, Russian economy, GDP, oil prices, capital formation, labor productivity, granger causality, impulse response function, economic growth, transition economy, natural resource rents, technological progress, population growth, regression analysis
Frequently Asked Questions
What is the primary focus of this research paper?
The paper focuses on analyzing the economic growth of Russia between 1990 and 2013 using the exogenous (neoclassical) growth theory to identify key contributing factors.
What are the central themes discussed in this study?
The study covers the impact of external factors like global oil prices, the role of labor and capital, the importance of technological innovation, and the challenges of a transition economy.
What is the main research question of the work?
The research asks to what extent exogenous variables, particularly those related to natural resources and global market fluctuations, contribute to the economic growth of Russia.
Which scientific methods were used in the analysis?
The author utilizes econometric methods, including least squares regression, the Cobb-Douglas production function, Granger causality tests, and impulse response functions.
What topics are covered in the main body of the text?
The main body examines historical reform policies, theoretical models of growth, data analysis from IMF sources, and statistical evaluations of the Russian economy's performance.
Which keywords best characterize this research?
The most relevant keywords include exogenous growth theory, Russian economy, GDP, oil prices, capital formation, and factor productivity.
How does the author explain the high dependency on natural resources?
The author highlights that over 80% of Russia's exports consist of oil and gas, and the study uses regression analysis to demonstrate how fluctuations in oil prices correlate strongly with variations in national output.
What specific concerns are raised regarding the labor force?
The author notes that while the current labor force is adequate, negative population growth and demographic shifts pose a significant risk, potentially leading to a decline in productivity and long-term economic instability.
What does the impulse response function analysis reveal?
The analysis indicates that labor force changes have a substantial delayed impact on the economy, with significant effects manifesting four to eight years after an initial shock.
- Arbeit zitieren
- Nosirjon Juraev (Autor:in), 2013, Post Soviet Union Period. Exogenous Growth Theory in RUSSIA 1990-2013, München, GRIN Verlag, https://www.grin.com/document/267953
