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Impact of the Demographic Processes on the Inflation Rate in the Russian Regions

Author

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  • Ekaterina Sergeevna Shevchenko

    (National Research University Higher School of Economics)

Abstract

The influence of demographic processes on the inflation rate in Russian regions is reviewing. The hypothesis of heterogeneous influence of the population of different age groups on the inflation rate are testing. Such influence can be explained by the different behavior of age groups concerning consumption, inflation expectations, as well as other factors that determine the behavior of different age groups, the specifics of the country’s regions, and interregional interaction. The database includes the statistical indicators of 81 regions of Russia for the period from 2010 to 2018. As the dependent variable the author has taken the inflation rate. As the independent variables in this paper are using the growth rate of the working age population share, the population younger than working age share, and the population older than working age share. Control variables are the openness of the economy, the growth rate of the physical volume index of investment, and the regional fiscal balances. The global and local Moran, Geary, Getis and Ord indices were used to identify the spatial dependence of the inflation rate. The obtained results allowed us to conclude that we can observe a positive global autocorrelation of the inflation rate in Russian regions and there is a need to use spatial models. Estimation of the Durbin spatial model allowed us to confirm the hypothesis. The growth rate of the working-age population share is inflationary, the growth rate of the population older than working age is inflationary too, but less, and the growth rate of the population younger than working age – deflationary. The obtained conclusions can be used to forecast inflation in the regions of Russia

Suggested Citation

  • Ekaterina Sergeevna Shevchenko, 2021. "Impact of the Demographic Processes on the Inflation Rate in the Russian Regions," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 123-143.
    • Handle: RePEc:far:spaeco:y:2021:i:1:p:123-143
    DOI: https://dx.doi.org/10.14530/se.2021.1.123-143
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    References listed on IDEAS

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    1. Yunus Aksoy & Henrique S. Basso & Ron P. Smith & Tobias Grasl, 2019. "Demographic Structure and Macroeconomic Trends," American Economic Journal: Macroeconomics, American Economic Association, vol. 11(1), pages 193-222, January.
    2. Darya Antonova & Yulia Vymyatnina, 2018. "Inflation and Population Age Structure: The Case of Emerging Economies," Russian Journal of Money and Finance, Bank of Russia, vol. 77(4), pages 3-25, December.
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    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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