Diagnosing the “Russian Disease”: Growth and Structure of the Russian Economy Then and Now
AbstractThis paper diagnoses the present Russian situation characterized as the “Russian Disease.” First, it shows that a key symptom of the Russian Disease is a strong positive relation between the country’s real growth and terms-of-trade-effects, which is different from the symptoms of the “Dutch Disease”. This paper also presents three variants (oil prices, terms-of-trade, and trading gains) of the concept of terms-of-trade effects using the SNA framework. Second, it shows a strong positive impact of terms-of-trade effects on the Russian manufacturing, which markedly differs from one of the major symptoms of the Dutch Disease (slower growth of manufacturing through the booming mining sector and real appreciation of exchange rates). This paper also suggests the significance of the manufacturing industry for the Russian economy. Third, this paper shows that the appreciation (depreciation) of real exchange rates of Russia’s rubles induced the boost (decline) of its imports. Fourth, this paper proves that the boost of imports, in turn, induced the GDP growth of the trade sector as one of the major sources of the Russian overall growth. We also present the impact of oil prices on two kinds of real exchange rates (CPI-based and GDP-based real exchange rates).
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Bibliographic InfoPaper provided by Russian Research Center, Institute of Economic Research, Hitotsubashi University in its series RRC Working Paper Series with number 28.
Length: 30 p.
Date of creation: Oct 2010
Date of revision:
Russian Disease; Dutch Disease; growth; oil price; terms-of-trade; trading gain; manufacturing; imports; real exchange rate; trade;
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- P24 - Economic Systems - - Socialist Systems and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
- P28 - Economic Systems - - Socialist Systems and Transition Economies - - - Natural Resources; Environment
- P59 - Economic Systems - - Comparative Economic Systems - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-11 (All new papers)
- NEP-CIS-2010-12-11 (Confederation of Independent States)
- NEP-TRA-2010-12-11 (Transition Economics)
You can help add them by filling out this form.
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