Employment elasticity of output growth in Kazakhstan economy: Recent evidence from a macroeconomic perspective

Conventional monetary policy tools became less effective, with nominal short-term interest rates approaching the zero-lower bound during COVID-19. Instead, central banks adopted a range of unconventional monetary policies. Thus, perceived inflation has become a key channel for monetary policy transmission. Despite how vital perceived inflation is, quantifying perceived inflation with accuracy remains questionable and challenging. As a result, we focus on developing a novel measurement of perceived inflation - the psychological inflation index. Our approach is based on psychological theories and considers loss aversion, which creates advancements to previous versions. The new index satisfies many expected criteria: (i) it broadly co-moves with the headline inflation index during everyday contexts; (ii) it captures abnormal price evolution better than headline inflation during crisis periods; (iii) it links tightly with monetary policy and economic dynamics. Psychological inflation, therefore, might be helpful in forecasting headline inflation, estimating real interest rates, predicting economic players' behavior, and setting salaries and prices. Psychological inflation, combined with headline inflation, provides a clearer picture of the credibility of monetary policy.

Section: Existing Measurements Of Perceived Inflationmentioning

confidence: 99%

Psychological inflation: Definition and measurement

Pham,

Nguyen,

2024

“…Another risk is that employment elasticity in Kazakhstan is negatively associated with trade openness, inflation, and the exchange rate. (Bhat et al, 2022) www.ieeca.org/journal 905…”

Section: Conclusion and Recommendationsmentioning

confidence: 99%

Regional specialization and diversification of industries in Kazakhstan

Alibekova,

Alzhanova,

Osmanov

et al. 2023

This research aims to assess the degree of specialization and diversification in the regions of Kazakhstan. The method of calculating the location quotient is used to determine the degree of specialization of the regions. The industrial location quotient for three periods - 2010, 2015, and 2019 - is calculated to observe the dynamics of specialization of industries in the regions. The research identified sustainable, unstable, fading, and emerging. The degree of industrial diversification in the region is determined based on the number of sustainable industries in the region. The categorization of industries according to the dynamics of specialization makes it possible to apply various mechanisms and ways to recover fading industries and support unstable and emerging industries. The research results can be used in designing Kazakhstan's regional industrial and innovation policies.

“…From 1995to 2016, Irkisi and Cyhan (2019 show that trade liberalization has a bidirectional and constructive influence on growth in 13 European transition economies in the short-and long-run. Also, Bhat et al (2022) applied the ARDL bounds testing approach, which has been incorporated into their research to assess the impact of various macroeconomic determinants evaluating the Kazakh economic development.…”

Section: Literature Reviewmentioning

confidence: 99%

The linkage between international trade and economic growth in Kazakhstan

Akhter

Mir

Megits

2022

Self Cite

Increased international trade flows and reduced trade restrictions have sparked ongoing debate and discussion about the influence of international trade on economic progress. Based on the empirical evaluation, the paper investigates the impact of trade openness on Kazakhstan's economic growth in a multivariate framework. It includes investment, international trade, labour force, human capital, and natural resource as explanatory constructs when gross domestic product per capita is the regressand variable. This research aims to assess the long-term relationship between trade and income development in Kazakhstan from 1992 to 2020. The Phillips and Perron (1988) and augmented Dickey and Fuller (1981) tests are used to check data stationarity. The bound test shows that the concerned variables have a long-term relationship. The results conclude that trade negatively impacts growth in the short and long run. While capital formation, labour quantity, quality, and natural resources positively affect the development of Kazakhstan's economy. This negative impact of trade on growth could be attributed to the country's shortage of good institutions and inefficient management, economic structure, and development policies. Also, it could be due to the substantial negative impact of imports countering the positive effect of exports.