This paper assesses the relationship between financial literacy and over-indebtedness of Russian households using panel data from the Survey of Consumer Finances collected in Russia during 2018–2024. Russia is an interesting case: a relatively young consumer-finance market in which a lack of financial literacy may increase the likelihood of household over-indebtedness. To test this hypothesis, we use a household fixed-effects panel regression model to control for all unobservable time-invariant household characteristics, together with an instrumental-variable (IV) approach with clustered standard errors based on a two-stage least squares (2SLS) procedure to correct for potential simultaneity between financial literacy and over-indebtedness. The instrument is the number of universities per region. Our main finding is that both the fixed-effects panel regression and the 2SLS estimates indicate no relationship between financial literacy and household over-indebtedness in Russia in 2018–2024; this result is robust to alternative specifications of variables and models.
This paper analyzes total factor productivity (TFP) in Russia over 2009–2015 using firm-level data. Stochastic frontier analysis is employed to simultaneously estimate TFP growth and the distance to the production-possibility frontier for each firm in the sample. The results suggest significant positive rates of technological progress; however, the gap between technological frontier firms and laggards widened over the entire period under consideration. Consequently, most sectors experienced negative average TFP growth in 2009–2015. Technology diffusion from leading to less efficient firms in Russia remained limited, resulting in persistently low average productivity growth. Although the market share of less efficient firms shrank over time, these firms did not exit the market, leaving scarce resources trapped in inefficient production. To accelerate TFP growth, it is essential to create conditions that encourage the quicker exit of inefficient firms. This can be achieved by simplifying bankruptcy procedures, shifting government support from distressed to expanding enterprises, and reducing unreasonable administrative barriers.
This paper presents a dynamic overlapping generations general equilibrium model for the Russian economy to assess the economic and fiscal effects of the 2018 pension reform, which raised the statutory retirement age. The model incorporates realistic demographic projections, variable labor supply responses, and exogenous scenarios for oil prices. It evaluates the impact of the reform across a range of future demographic and external conditions by comparing post-reform trajectories of macroeconomic aggregates, public deficits, and tax rates with baseline scenarios without reform. The results show that raising the retirement age moderately reduces consumption in the short run but leads to more robust growth in output, investment, government spending, and exports in the long term. Pension reform improves fiscal sustainability by lowering the required budget-balancing VAT rate and pension fund deficit, especially under adverse demographic conditions or low oil prices. The fiscal effect of reform is muted in optimistic demographic scenarios with strong labor force growth, but remains significant when population aging intensifies fiscal pressure. These findings highlight the importance of structural reforms for long-term macroeconomic stability and underscore the critical role of demographics and external shocks in shaping pension system performance.
Digital multi-sided platforms intermediate a growing share of household expenditure, yet direct cross-country measurement of platformization remains infeasible owing to the absence of publicly available data. This paper treats platformization — defined as the ratio of household consumption expenditure intermediated by platforms to total consumer spending — as a latent variable and estimates it using a Multiple Indicators Multiple Causes (MIMIC) model for a panel of 86 countries over 2000–2023, drawing on the World Bank’s World Development Indicators. The selection of causal and reflective variables is grounded in the Aghion–Howitt endogenous growth model, operationalizing the creative destruction mechanism in the context of platform economics. The methodological contribution consists in applying a Mundlak decomposition within the MIMIC specification, separating short-run (within-country) and long-run (between-country) determinants of platformization while preserving the random-effects structure required for latent variable identification. Bootstrap analysis and leave-one-country-out procedures identify a robust core of determinants: financial depth, broadband access, regulatory quality, urbanization, and R&D expenditure (the latter exhibiting a negative between-effect interpreted as a crowding-out effect: countries with lower average R&D intensity exhibit higher platformization because they are recipients of platform technologies originating in a small number of R&D-intensive exporting economies). Country-level estimates reveal conditional β-convergence alongside persistent absolute gaps among income groups, consistent with technology diffusion under institutional heterogeneity. The resulting estimates are benchmarked against independent point estimates from the literature and can serve as a basis for cross-country comparison of platformization levels and assessment of long-run regulatory effects.
Many studies have found that inflation expectations vary systematically across population groups. This heterogeneity is driven among other factors by the level of financial literacy — a pattern documented for Russia as well. Earlier Russian evidence, however, rested on a single survey wave; we confirm the finding using data spanning three years: respondents with higher financial literacy tend to have lower inflation expectations. For this study, we rely on the pseudo-panel method to combine the results of two regular household surveys focused on inflation expectations and consumer finance. Our findings are based on responses to both quantitative and qualitative questions, controlling for key socio-demographic characteristics. We show that inflation expectations are linked to the level of financial literacy, but this relationship is nonlinear. Our conclusion holds for short- (one month ahead), medium- (one year ahead) and long-term (three years ahead) expectations. The nonlinearity of the relationship is evident: despite similar differences in the level of financial literacy, the gap in inflation expectations is larger in the least competent group of respondents in comparison with financially literate participants. We find that estimates of future inflation are linked to financial literacy through the perception of observed inflation, as more financially literate respondents cite lower rates of price growth, and their opinions about future inflation are tied to their estimates of observed price movements. Financially literate respondents’ estimates of current inflation are closer to the Rosstat-calculated measure of price growth than are the estimates of other respondents.
This study examines the impact of extreme temperatures on energy-sector companies, highlighting the financial and economic consequences of these temperatures as an important aspect of financial performance analysis. The research methodology is based on the application of regression models to corporate financial statements. This research obtained statistically significant evidence of a relationship among asset structure, financial flows, and external temperature for 55 publicly traded energy companies from 20 countries. The transformation of asset and cost structures is a necessary adaptation measure for companies operating in regions with harsh climates; the results reveal a significant excess of capital expenditures over operating expenses under such conditions. This study identified changes in the structure of financial flows that increased the financial burden and reduced investment attractiveness for these companies. The J-factor’s nonlinear function reflects greater variability in operating conditions at low temperatures than at high temperatures, explaining contradictions in capitalization between regions with hot and extremely cold climates. The forced nature of the changes and the involvement of many sectoral players heighten the challenges in finding solutions to ensure market fairness and mitigate the uneven impact of climate change on businesses in colder regions. This study’s results partially explain inconsistencies in tariff setting and product cost coordination among companies in regions with extreme climates and those in more temperate areas and outline the contours of required management decisions at the global, national, and corporate levels. The author expresses sincere gratitude to the attendees of the Lomonosov Readings in April 2025 and the 52nd EBES conference in Istanbul in July 2025 for their insightful comments. The author also thanks Professor Viktor Suyts for his continuous support and the companies that provided financial statements and valuable comments for this study.
This paper analyzes the evolution of tax systems in the countries of Central and Eastern Europe and the former Soviet Union during the transition from centrally planned to market economies. Its main objective is to identify the principal directions of tax reform from the beginning of liberalization in 1989 to the stabilization of the basic tax structures by the mid-2000s. The paper combines comparative institutional analysis with country evidence on the reform of the value-added tax, personal and corporate income taxation, excises, tariffs, and property taxation. Particular attention is paid to the role of technical assistance, the sequencing of reforms, and the interaction between tax design and administrative capacity. The analysis shows that pre-reform tax systems were largely incompatible with market allocation and modern revenue administration because they operated mainly as accounting devices within state-controlled economies. During the transition, the VAT became the central instrument of reform, while income taxation had to be redesigned to reflect the growing role of private ownership and the need to coordinate individual and corporate tax treatment. Excise taxation and tariffs were gradually aligned with international practice, and property taxation developed more slowly because of institutional weaknesses in cadastres, valuation, and local administration. Although reform paths differed across countries, the long-run outcome was convergence toward a broadly similar tax model centered on the VAT, income taxation, selective excises, and an emerging local property tax. The paper concludes that successful tax reform required not only legislative change but also administrative modernization, public understanding, and adaptation to country-specific institutional constraints. The experience of the region illustrates the importance of revenue-oriented reform, implementation capacity, and learning by doing in periods of systemic economic transformation.
This paper examines the impact of economic reforms in the USSR and the Comecon countries, in particular the Kosygin reform (1965), on the development of a system of international economic comparisons in 1962–1969. Using previously unpublished archival materials from Comecon and Soviet statistical agencies, the author shows that reform initiatives stimulated methodological innovations, such as purchasing power parity (PPP) comparisons. However, institutional conflicts, ideological constraints, and technological limitations hindered the system’s integration into global practice, notably the UN International Comparison Program (ICP). The article argues that, despite partial successes, the stagnation of the project after 1969 reflected deeper systemic deficiencies within planned economies, including bureaucratic inertia and unresolved competition among research centers.
The decentralized model of a communist economy based on autonomous state-owned or socially owned enterprises exposed to market signals (market socialism) was a response to the inefficiencies of the traditional model of a centrally planned economy, first introduced in the Soviet Union at the end of the 1920s and early 1930s. Market socialism was implemented in Yugoslavia from 1950 and in Hungary from 1968, bringing mixed results. A few other countries also tried this model, but either rolled back the reform soon after it began (Czechoslovakia in 1968–1969) or implemented it in a fragmentary and inconsistent way (Poland in the 1980s, the Soviet Union at the end of the 1980s), without positive results. The main obstacles to the implementation of this model had a political character, because it challenged the totalitarian character of a communist regime and the hegemonic position of the communist party. Only after the collapse of communist regimes in the late 1980s and early 1990s could genuine market reforms begin, but the concept of market socialism became useless.
This article reinterprets the Third Program of the CPSU (Communist Party of the Soviet Union) in 1961 as a rational, auditable social contract for the Soviet one-party state rather than a utopian manifesto. Reconstructing its Stalin-era prehistory—from drafts by Dmitry Manuilsky, Mark Mitin, Pavel Yudin, and Andrei Zhdanov between 1938 and 1947 to those generated under Nikita Khrushchev between 1958 and 1961—we show how successive elites translated ideological rivalry with the West into a ledger of quantifiable welfare obligations (expressed in per capita food, housing, goods, and the duration of the working day). The program’s distinctive function took shape within the traditional context of foundational Soviet documents: constitutions which codified the status quo and party programs that projected a development path for 20–30 years into the future. Under Khrushchev, academic economists “scientized” this practice, elevating consumption indicators and “scientifically grounded norms” to the core of a national strategy for the USSR: “communism in the main” by 1980. Conceptually, the program operated as an authoritarian commitment to build a socialist welfare state—a self-binding social contract that stabilized the post-Stalin transition but also generated path dependence, constraining later reform efforts. Empirically, we document the program’s internal tensions (communal services vs. individual household needs; socialist ethics vs. personal ownership) and its comparative ambitions (to catch up and overtake the United States in per capita welfare). The result is a reframing of Soviet modernity as a project in which technocratic calculation, welfare egalitarianism, and Cold War benchmarking were fused into a pragmatic, auditable program of one-party rule.
This article presents a comparative overview of the three main attempts to introduce market approaches into the economy of the Soviet Union during its seventy-year history: the New Economic Policy (NEP) of 1921–1928, the Kosygin reform of 1965, and perestroika from 1985 to 1991. The research aims to analyze and compare the nature, political conditions, institutional challenges, and ultimate consequences of these three initiatives, which sought to improve the Soviet system through incremental market integration without changing the core political power structure. Each of the three reform efforts initially triggered a period of accelerated growth, outperforming previous economic trends. However, these successes were short-lived, and all reforms were quickly rolled back. The study’s main finding indicates a fundamental structural incompatibility between market mechanisms and the Soviet political order. This contradiction, rooted in the communist idea, meant that when central control weakened, immediate interests (wages, consumption) outweighed long-term interests (investment). The reforms also differed significantly in their approach to private property: the NEP allowed it as a “temporary retreat,” the Kosygin reform strictly prohibited it, and perestroika gradually permitted private enterprise, eventually evolving into a “real revolution.” In the end, all three attempts failed to create a stable, durable system. The Soviet experience clearly demonstrates that, within its specific historical context, it was impossible to combine Soviet political power with market efficiency. The political core consistently rejected the necessary deep changes, leading to the strategic failure of all liberalization efforts.
This article examines archival records on crop yields and recruit numbers in eighteenth-century Russia, analyzing their dynamics and comparing them with data on recruits’ height as an indicator of changes in the standard of living. The study uses more than one hundred and ten archival sources, enabling the construction of time series. The resulting numbers confirm that the standard of living in Russia was generally low and changed in a cyclical pattern. The study reveals how military and tax reforms emerged as a significant driver of these economic fluctuations. The dataset compiled by the author not only facilitates estimations of living standards during this period but also enables researchers to address various questions in Russian social and economic history.
This paper explores how the health-related component of human capital affects economic performance in all five Central Asian countries. In particular, it analyzes the impact of life expectancy on overall GDP and output per worker, which characterizes labor productivity. The time frame includes the period from 2000 to 2021. The methodology is based on a standard growth accounting framework. Findings show that better health conditions, as indicated by the increase in life expectancy, have a significant impact on the productivity of a worker. Nonetheless, its contribution to total output growth remains relatively small. In contrast, capital investment plays a crucial role in boosting labor productivity and fostering economic growth, especially in capital intensive countries such as Kazakhstan and Uzbekistan.
We find that, while different models used to estimate the output gap in five major emerging economies show similar trends over time, they lead to different conclusions about how well the output gap can predict inflation. This suggests that the choice of model can significantly impact the conclusions drawn about the relationship between the output gap and inflation. The multivariate Hodrick–Prescott filter and the structural vector autoregressive model produce the smallest forecast errors in most cases among the four output gap models considered. We further find some indications of a better inflation forecasting ability of the output gap in countries with inflation targeting, suggesting that the improved transparency related to inflation targeting might support the inflation forecasting process.
The paper is devoted to econometric analysis of the impact of Russia–Ukraine conflict, which started in February 2022, on TV advertising strategies of fast-moving consumer goods (FMCG) companies. With the help of quantitative methods, the study analyzes changes in TV advertising expenditures of domestic and foreign brands, using Mediascope TV Index daily data from 2021 and 2022 to test the hypothesis of whether this geopolitical shock made advertising costs dwindle or rise. Cross-country-of-origin and cross-product differences are also investigated. It is confirmed that, on average, the shock resulted in a reduction of ad expenditures of FMCG companies with a pronounced effect on domestic brands and brands from “friendly” countries. Thus, the cost-saving arguments seem to outweigh the expected benefits from promotion in the majority of the considered FMCG product markets. The increase in ad spending on isolated product groups (clothing, electronics, personal hygiene items and tobacco and alcoholic beverages) indirectly evidences that the brands faced sharp intensification of competition because of structural changes in the markets under which extra ad spending was found reasonable.
Despite the growing emphasis on the nexus between growth and macroeconomic indicators, research on the influence of cryptocurrencies on economic performance remains limited. This study compares the impact of two leading cryptocurrencies, Bitcoin and Ethereum, on economic growth, alongside inflation, market uncertainty, and oil and gold prices, using panel data from 14 countries between Q3 2015 and Q3 2023. The results demonstrate robust cross-sectional dependence, indicating that economic shocks in one country affect the entire group. Therefore, second-generation tests are employed to confirm the presence of stationarity in the variables. Except for Bitcoin’s trading volume, panel fully modified ordinary least squares estimations reveal a significantly positive impact of cryptocurrencies on growth. Cointegration is present in the long run, while in the short run, strong bi- and unidirectional causality is found for all cryptocurrency proxies. The study provides insights that can help policymakers develop strategies to align economic growth with the crypto market, benefiting the broader economy.
Financial development plays a crucial role in shaping economic growth, yet it can introduce volatility. This study examines the relationship between financial development and economic growth volatility. Using panel data from 60 countries (30 developed and 30 developing) for 1981–2022, we employ panel-corrected standard errors and generalized method of moments to ensure robustness. Financial development is analyzed through financial institutions and financial markets across three dimensions: depth, access, and efficiency. Conceptually, the paper finds that the supply-leading hypothesis does not account for the economic growth volatility associated with excessive financialization. The results indicate that, at higher levels, financial development has a volatility-enhancing impact in developed countries, while in developing countries it has a volatility-reducing effect. Policymakers in developed countries should ensure that credit expansion is aligned with real-sector development. Regulators should monitor adverse effects of financial depth and ensure funds are directed toward real-sector growth, while improving access and efficiency. In a too‑much-finance scenario, economies need moderators — such as strong regulatory quality and well-defined rights for creditors and borrowers — to mitigate volatility-enhancing effects.
This paper addresses a significant gap in the existing literature on financial inclusion — namely, the dynamic instability of the impacts generated by its determinants in four major emerging market economies: Brazil, Russia, India, and China. A time-varying coefficients framework is applied to examine whether the factors shaping financial inclusion at the aggregate level produce nonlinear effects over time. The analysis covers the period from 2000–2001 to 2022–2023. A composite financial inclusion index is constructed to capture inclusion across three key dimensions — availability, access, and usage — using the distance function approach. Three classes of determinants are modeled: socio-demographic, infrastructural, and macroeconomic variables. Evidence indicates structural instability in the financial inclusion process for the BRIC economies, with several determinants exerting nonlinear impacts over time. The findings challenge the conventional assumption of time-invariant relationships between financial inclusion and its dominant determinants. The results reveal considerable temporal volatility in the effects of macroeconomic factors, including growth and inflation, on financial inclusion across emerging markets. Policymakers should adjust strategies, moving beyond assumptions of linear processes and managing dynamic, nonlinear factors more effectively to achieve universal financial inclusion.
This paper applies a macroeconometric approach to analyze structural shocks and their impact on the key transmission channels of monetary policy in Russia, focusing on the period since the imposition of sanctions and the monetary regime shift beginning in 2014. The approach combines the Lee–Strazicich LM test, used to identify structural breaks, with a Bayesian VAR model that estimates the posterior distribution of shock effects and responses. The model is further extended by dummy variables indicating the periods of imposed sanctions in 2014, the change in the Bank of Russia’s monetary policy in 2015, and the Russia–Ukraine conflict in 2022. The findings indicate that the interest rate transmission channel operates in a fully asymmetric manner: the short run is characterized by the monetary policy shift, and the long run — by the conflict in Ukraine, suggesting the implementation of an expansionary and later highly restrictive policy with a temporary dual approach. The credit and exchange rate transmission channels are identified as the two most important stabilization mechanisms for macroeconomic shocks, with the 2015 regime change significantly enhancing the absorption of exogenous shocks. In contrast, the extended price transmission channel exhibits a more moderate capacity for shock absorption, underscoring the Bank of Russia’s success in anchoring inflation expectations. Overall, the findings confirm that proactive monetary policy shapes inflation expectations effectively by employing two main tools: managing the key interest rate to control inflationary pressures and managing the ruble exchange rate to stabilize the economy.
