Belarusian Economic Research and Outreach Center

Working Papers

22 may 2016 Александр Ващилко

Effects of Trade Wars on Belarus

This paper looks at the effects of the trade wars that followed 2014 events in Ukraine on Belarus. The estimation of the model predicts the increase in the tarif revenue collected by Belarus. Because of ban on imports, the tari¤ revenue of Russian Federation declines. Being a part of Customs Union, Belarus needs to participate in the tarif revenue redistribution. The need to participate in the tarif revenue redistribution and the decline in the tarif revenue collected by Russian Federation lead to the decrease in the welfare of Belarus. To avoid this decrease, Belarus should argue for the modi…cation of the redistribution schedule.

Effects of Population Ageing on the Pension System in Belarus

Belarus currently has a relatively generous pay-as-you-go pension system, but population aging coupled with recent problems with economic growth will soon make it unsustainable. We build a rich OLG model of Belarusian economy, which shows that without reform the Pension Fund will run into persistent and growing deficit, which will reach 9 per cent of GDP by 2055. We also compute the fiscal projections of several parametric pension reforms.

Recent Developments in Consumer Credit and Default Literature

This survey discusses recent contributions to the quantitative literature on unsecured consumer debt and default, and some ongoing challenges for the literature.

Exchange Rate, Imports of Intermediate and Capital Goods and GDP Growth in Belarus

The paper analyzes the short-run and long-run effects of imports of intermediate and capital goods on Belarusian economic growth for the period 2005 to 2015 taking into account large upward and downward exchange rate adjustments of Belarusian ruble. The empirical findings from the autoregressive distributed lag regressions indicate that there are negative effects of imports of intermediate goods on economic growth both in the short and long run. Second, contrary to the theory devaluation of the Belarusian ruble negatively influences both GDP growth and imports of intermediate goods in Belarus. Third, the results of Toda–Yamamoto causality test shows that GDP growth Granger causes growth in imports and exports, supporting the hypothesis that trade is more a consequence of the rapid economic growth in Belarus than a cause. Fourth, the findings from forecast error variance decomposition (VDC) confirm results obtained from TY causality test and additionally emphasize that changes in imports in Belarus are mostly driven by changes in exports especially in the long-run. Finally, the findings from VDC also indicate that the main contributor to growth fluctuations are domestic capital investments.

Gender and Innovativeness of the Enterprise: the Case of Transition Countries

Little knowledge exists on difference in innovation behavior of men and women leading the SMEs in transition countries. This paper estimates whether there is a gender gap in SMEs innovation actions. Results show that propensity to innovate is higher among female owners and this finding preserves for 5 measures of innovativeness. Thus, female involvement in business might be beneficial for the innovative sustainable development of economy. Estimation of the gap in performance of implemented innovations did not reveal any strong prevailing gender in terms of efficiency.

Belarusian Business Cycle in Cross-country Comparison: Industry and Aggregate Data

The paper documents stylized facts about Belarusian business cycle based on aggregate and industry data and puts it into an international content. First, the aggregate fluctuations in Belarus are mostly driven by the wedge, which resembles a time-varying investment tax. Second, the fluctuation in relative prices of an industry is typically more important than volume fluctuation. Furthermore, the impact of price fluctuations is partially o ffset by volume fluctuation. Third, the aggregate cycle is smoother than the industry-speci fic one. In particular, agriculture, construction and fi nance experience a very sharp drop in a recession.

Is Market Timing Good for Shareholders?

We challenge the view that equity market timing always bene ts shareholders. By distinguishing the e ect of a rm's equity decisions from the e ect of mispricing itself, we show that market timing can decrease shareholder value. Additionally, the timing of equity sales has a more negative e ect on existing shareholders than the timing of share repurchases. Our theory can be used to infer rms' maximization objectives from their observed market timing strategies. We argue that the popularity of stock buybacks and the low frequency of seasoned equity o erings are consistent with managers maximizing current shareholder value.

Determining the Common External Tari ff in a Customs Union: Evidence from the Eurasian Customs Union

How do member states determine the Common External Tariff (CET) in a Customs Union? While a large theoretical literature studies the incentives faced by governments when negotiating the CET, empirical evidence is so far scant. This paper studies a large panel data set of tari data from the Eurasian Customs Union and demonstrates the importance of mutual protectionism: member states bargain to expand to their partners the protection of goods that were protected nationally.

Accounting for Labor Productivity Puzzle

In the recent decades aggregate labor productivity in the U.S. became countercyclical (labor productivity puzzle). At the same time the U.S. experienced dramatic changes in the structure of households due to increased female labor force participation.

Macroeconomic Performance, Individual Characteristics and Preference for Democracy

What affects individual preference for different types of political regime? Is it something individual or are there factors from outside that form preferences? This paper investigates the determinants of individual preferences for democratic values and looks at differences in impact of influencing factors in transition and non-transition countries.