Sir Robert Giffen Meets Russia in Early 1990s

This paper analyzes the theoretical foundations of Giffen goods and details the difficulty with which prior studies have encountered limited empirical proof of Giffenity. Subsequently, a discussion of the economic overview of Russia during the early 1990s is provided. The paper then applies Giffenity to the newly established free market system of post-Soviet Union Russia while acknowledging changes in the prices for goods, specifically, for inferior food commodities. The paper concludes by advocating for the need to incorporate Giffenity into current economic theory to make it more comprehensive.Giffen goods, inferior goods, subsistence, Russia, household consumption, post-soviet transition

Composite Leading Indicators for Ukraine: An Early Warning Model

The project has undertaken the following tasks: Based on an analysis of the pattern of growth of the Ukrainian economy since the end of the post-Soviet recession (the year 2000) we have formulated the hypotheses concerning the factors preceding/affecting the upturns and downturns (with a focus on the latter) of the country’s growth; We have studied international “best practice” in early warning indicators in order to design a similar system for Ukraine; We have selected the relevant indicators, consistent with our hypotheses and used a probit model in order to experiment with these indicators; The final set of indicators used in the model included the following lagged independent variables: changes in the value of export, changes in real Exchange rate of the hryvnya, producers’ price index adjusted for domestic price inflation index and the IMF’s metal price index, bank credit interest rate, changes in the industrial output of the European Union; our dependent variable (which was used as a proxy for the overall economic growth) was changes in real industrial output; The model was used to formulate a warning forecast for the Ukrainian economy for the second half of 2008 based on the data for the January 2000 – June 2008 period; all predictions for the second half of 2008 have delivered warning about a downturn of the Ukrainian economy; We ran a few additional experiments with the model, and We have recommended several further steps of analysis toward a full implementation and institutionalization of such a model in the near future.business cycle, forecasting, econometric model, Ukraine, Ukrainian economy, economic growth, GDP, early warning indicator

TOTAL FLOW IN INPUT-OUTPUT MODELS

From the algebraic perspective, the basic concept of the classical Leontief I-O (Input-Output) analysis lies in the distinction between two principal kinds of coefficient matrices: technical and structural. It is not universally recognized that neither of these expresses exactly the total flow (total relationships) between elements of an I-O system. Without knowledge of total flow it has been impossible to answer correctly many important theory and policy questions. In this dissertation, an initial step is taken to bridge the gap by providing a third choice. This is another coefficient (and flow) matrix that quantifies the total flow and thereby depicts adequately the full complexity of I-O relations. It is shown that total flow analysis is a useful tool in dealing with various I-O kinds of problems in economics, ecology, and other disciplines. The dissertation is composed of two parts. Part One: Defining Total Flow in an Ecosystem Input-Output Model. The concept of total flow is introduced. Total flow analysis is treated as a subdomain of ecological flow analysis. Its basic notions are presented and illustrated with empirical data for a particular small aquatic ecosystem--that of Cone Spring. The applicability of the total flow concept to specific ecology problems (such as trophic relationships, cycling of nutrients, and others) is indicated. Part Two: Measuring Connectedness of Input-Output Models. The concept of scalar measures of the degree of internal connectedness in I-O models is considered. A number of measures, drawn from the economic and the ecological I-O literatures, are examined. It is shown that none of the measures represent connectedness adequately. The concept of the total flow is reviewed and applied as a basis for calculation of several indexes, such as the average total flow coefficient and the average internal multiplier, both of which are sensitive to (1) number, (2) diversity and (3) volume of I-O linkages and express appropriately the overall connectedness

Giffen Goods in a Transition Economy: Subsistence Consumption in Russia

In the last decade, events outside the realm of Western economics have been viewed as “paradoxes.” We focus on the Giffen paradox, and argue that Giffenity is consistent with a generalized law of demand. We confirm the occurrence of Giffenity in Russia during the early 1990s. During this period, people reduced consumption of less affordable meat and fish despite a decline in their relative prices, while augmenting their consumption of more affordable potatoes and bread, a significant increase in relative prices of the latter goods notwithstanding. We conclude that incorporating Giffenity into current economic theory will make it more robust.Giffen goods, inferior goods, subsistence, Russia, household consumption, post-soviet transition