GDP growth in Russia: different capital stock series and the terms of trade

Abstract

There are different academic assessments as to what lies behind Russia's GDP growth: total factor productivity or fixed capital investments. Studies that reconstruct capital stocks for Russia using gross fixed capital formation and the perpetual inventory method tend to lean towards the former answer, while capital services datasets that have recently been made available lean towards the latter. We reconstruct a capital stock series for Russia for 1995-2013, and compare the results to two capital services time series using the Solow growth model. We also take into account terms of trade developments that have lent strong support to the economy. Finally, we use these tools to construct four possible scenarios for Russia's economic growth up until 2030. TiivistelmäTaloustieteellisessä kirjallisuudessa on erilaisia arvioita siitä, onko Venäjän bkt:n kasvun taustalla kokonaistuottavuuden vai kiinteiden investointien kehitys. Tutkimukset, joissa rakennetaan pääomakanta käyttämällä kiinteiden bruttoinvestointien aikasarjoja ja PIM-menetelmää, päätyvät edelliseen selitykseen, kun taas viime aikoina valmistuneet pääomakannan palveluvirtatarkastelut päätyvät jälkimmäiseen selitykseen. Tässä tutkimuksessa rakennetaan Venäjälle pääomakantasarja vuosille 1995-2013 ja verrataan tuloksia kahteen palveluvirtatarkasteluun käyttäen Solowin kasvumallia. Otamme myös huomioon vaihtosuhteen, joka on selvästi tukenut talouskehitystä. Lopuksi laadimme näillä työkaluilla Venäjälle neljä mahdollista tulevaisuuden kasvuskenaariota vuoteen 2030 asti. I thank the participants at seminars in ETLA and BOFIT for their helpful comments. Any remaining errors and omissions are of course my own. Funding by The Confederation of Finnish Industry and Employers (TT) Foundation is gratefully acknowledged.

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