Long-Term Growth Prospects for the Russian Economy

34 Pages Posted: 11 Apr 2007

See all articles by Roland Beck

Roland Beck

European Central Bank (ECB)

Annette Kamps

Kiel Institute for the World Economy

Elitza Mileva

European Central Bank; Fordham University - Economics Department

Date Written: March 2007

Abstract

This paper provides an assessment of Russia's long-term growth prospects. In particular, it addresses the question of the medium- and long-term sustainability of the country's currently high growth rates. Starting from the notion that Russia's fast economic expansion in recent years has benefited from a number of singular factors such as the unprecedented rise in oil prices, the paper presents new evidence on Russia's oil price dependency using a Vector Error Correction Model (VECM) framework. The findings indicate that the positive impact of rising oil prices on Russia's GDP growth has increased in recent years, but tends to be buffered by an appreciation of the real effective exchange rate which is stimulating imports. Additionally, there is empirical confirmation that growth in the service sector - a symptom usually associated with the Dutch disease phenomenon - is mainly a result of the transition process. Finally, the paper provides an overview of the relevant factors that are likely to affect Russia's growth performance in the future.

Keywords: Russia, economic growth

JEL Classification: O43, O 47, O51, O11, O14

Suggested Citation

Beck, Roland and Kamps, Annette and Mileva, Elitza, Long-Term Growth Prospects for the Russian Economy (March 2007). ECB Occasional Paper No. 58. Available at SSRN: https://ssrn.com/abstract=967603

Roland Beck (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Annette Kamps

Kiel Institute for the World Economy ( email )

P.O. Box 4309
Kiel, D-24100
Germany

Elitza Mileva

European Central Bank ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Fordham University - Economics Department ( email )

441 East Fordham Road
Bronx, NY 10458
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
482
Abstract Views
2,323
rank
58,025
PlumX Metrics