Russia's Regions: Income Volatility, Labor Mobility and Fiscal Policy
AbstractRussia's regions are heavily exposed to regional income shocks because of an uneven distribution of natural resources and a Soviet legacy of heavily skewed regional specialization. Also, Russia has a limited mobility of labor and lacks fiscal instruments to deal with regional shocks. We assess how these features influence the magnitude and persistence of regional income shocks, through a panel vector autoregression, drawing on extensive and unique regional data covering last decade. We find that labor mobility associated with regional shocks is far lower than in the United States yet higher than in the EU-15, and that regional expenditures tend to expand in booms and contract in recessions. We discuss institutional factors behind these outcomes and policy implications.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 05/185.
Date of creation: 01 Sep 2005
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Other versions of this item:
- Kwon, Goohoon & Spilimbergo, Antonio, 2005. "Russia's Regions: Income Volatility, Labour Mobility and Fiscal Policy," CEPR Discussion Papers 5265, C.E.P.R. Discussion Papers.
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- P52 - Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-10-22 (All new papers)
- NEP-CIS-2005-10-22 (Confederation of Independent States)
- NEP-GEO-2005-10-22 (Economic Geography)
- NEP-MAC-2005-10-22 (Macroeconomics)
- NEP-PBE-2005-10-22 (Public Economics)
- NEP-TRA-2005-10-22 (Transition Economics)
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