Belarusian Economic Research and Outreach Center

Working Papers

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.

 Igor LivshitsJames MacGee, Michele Tertilt

The Democratization of Credit and the Rise in Consumer Bankruptcies

Financial innovations are a common explanation for the rise in credit card debt and bankruptcies. To evaluate this story, the authors develop a simple model that incorporates two key frictions: asymmetric information about borrowers’ risk of default and a fixed cost of developing each contract lenders offer.

Belarusian Economic Growth Decomposition

Belarus experienced rapid economic growth in the 2000's, which abruptly came to halt after 2008. The authors found that the major source of growth was capital accumulation, while growth in total factor productivity (TFP) was modest. Moreover, government interventions and controls on the capital market contributed to misallocation which lowered aggregate productivity. Lack of productivity growth led to the loss of competitiveness on the international markets. Comparisons of TFP in Belarus with the Czech Republic and Sweden shows that comparative advantages of Belarus are concentrated in the natural-resource based industries, and TFP gap with the Czech Republic is not closing over time.

Screening as a Unified Theory of Delinquency, Renegotiation, and Bankruptcy

The authors propose a parsimonious model with adverse selection where delinquency, renegotiation, and bankruptcy all occur in equilibrium as a result of a simple screening mechanism.

 Dzmitry Kruk, Kiryl Haiduk

The Outcome of Directed Lending in Belarus: Mitigating Recession or Dampening Long-Run Growth?

This study analyzes the effects of directed lending upon total factor productivity and GDP growth in Belarus over the period of 2000–2012.

Multiple Structural Breaks and Inflation Persistence in Belarus

This paper address the issue of assessing inflation persistence in Belarus using quarterly seasonally adjusted data over 1996–2011.