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Regional volatility in emerging countries

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  • Goohoon Kwon
  • Antonio Spilimbergo

Abstract

An uneven distribution of natural resources and the Soviet legacy of artificial regional specialization expose Russia's regions to large income shocks. Using an unique regional dataset covering Russian regions between 1992 and 2003, we assess how these features influence the magnitude and persistence of regional income shocks. We propose a novel measure of regional exogenous shocks that we use to show that fiscal policy in Russia's regions has largely been pro-cyclical, exacerbating rather than moderating regional exogenous shocks. Copyright (c) 2009 The Authors. Journal compilation (c) 2009 The European Bank for Reconstruction and Development.

Suggested Citation

  • Goohoon Kwon & Antonio Spilimbergo, 2009. "Regional volatility in emerging countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(1), pages 97-119, January.
  • Handle: RePEc:bla:etrans:v:17:y:2009:i:1:p:97-119
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    References listed on IDEAS

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    1. Zhuravskaya, Ekaterina V., 2000. "Incentives to provide local public goods: fiscal federalism, Russian style," Journal of Public Economics, Elsevier, vol. 76(3), pages 337-368, June.
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    3. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
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    7. Boeri, Tito & Scarpetta, Stefano, 1996. "Regional mismatch and the transition to a market economy," Labour Economics, Elsevier, vol. 3(3), pages 233-254, October.
    8. Fidrmuc, Jan, 2004. "Migration and regional adjustment to asymmetric shocks in transition economies," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 230-247, June.
    9. Litwack, John M., 2002. "Central Control of Regional Budgets: Theory with Applications to Russia," Journal of Comparative Economics, Elsevier, vol. 30(1), pages 51-75, March.
    10. Olivier Blanchard & Roberto Perotti, 2002. "An Empirical Characterization of the Dynamic Effects of Changes in Government Spending and Taxes on Output," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1329-1368.
    11. Fabian Bornhorst & Simon Commander, 2006. "Regional unemployment and its persistence in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(2), pages 269-288, April.
    12. Maurice Obstfeld & Giovanni Peri, 1998. "Regional non-adjustment and fiscal policy," Economic Policy, CEPR;CES;MSH, vol. 13(26), pages 205-259, April.
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    Cited by:

    1. Gluschenko, Konstantin, 2010. "Methodologies of Analyzing Inter-Regional Income Inequality and Their Applications to Russia," MPRA Paper 66824, University Library of Munich, Germany.

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