Russia's Regions: Income Volatility, Labor Mobility and Fiscal Policy

19 Pages Posted: 3 Nov 2005

See all articles by Goohoon Kwon

Goohoon Kwon

International Monetary Fund (IMF)

Antonio Spilimbergo

International Monetary Fund (IMF) - Research Department; Centre for Economic Policy Research (CEPR); University of Michigan at Ann Arbor - The William Davidson Institute

Multiple version iconThere are 3 versions of this paper

Date Written: October 2005

Abstract

Russia's regions are heavily exposed to regional income shocks because of an uneven distribution of natural resources and a Soviet legacy of heavily skewed regional specialization. Also, Russia has a limited mobility of labor and lacks fiscal instruments to deal with regional shocks. We assess how these features influence the magnitude and persistence of regional income shocks, through a panel vector auto-regression, drawing on extensive and unique regional data covering the last decade. We find that labor mobility associated with regional shocks is far lower than in the US yet higher than in the EU-15, and that regional expenditures tend to expand in booms and contract in recessions. We discuss institutional factors behind these outcomes and policy implications.

Keywords: Russia, fiscal policy, panel VAR, labor mobility

JEL Classification: C33, E62, H77, J61, P52

Suggested Citation

Kwon, Goohoon and Spilimbergo, Antonio, Russia's Regions: Income Volatility, Labor Mobility and Fiscal Policy (October 2005). CEPR Discussion Paper No. 5265, Available at SSRN: https://ssrn.com/abstract=840864

Goohoon Kwon

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8433 (Phone)
202-589-8433 (Fax)

Antonio Spilimbergo (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6346 (Phone)
202-623-6336 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

University of Michigan at Ann Arbor - The William Davidson Institute ( email )

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
18
Abstract Views
1,107
PlumX Metrics