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Pandemic Economy: The Russian Way

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  • Pavel Aleksandrovich Minakir

    (Economic Research Institute FEB RAS)

Abstract

The article discusses the development of the Russian economy in the pandemic of a new coronavirus disease. The causes of prolonged stagnation are summarized and the barriers to the transition to recovery growth after the crisis of 2015–2016 are assessed. A macroeconomic ‘demand trap’ is described that impedes such a transition. It is shown that there is no possibility to use endogenous factors to exit this trap, and by early 2020 the external factors were in a state of unstable equilibrium which was disrupted by the beginning pandemic. The analysis of the pre-crisis dynamics of the global economy is carried out and it shows the probability of foreign demand to act as the Russian economy driver is low and, on the contrary, there is a high probability of aggravated stagnation in case of transition from low to negative growth rates in developed economies. Even without the pandemic, the global economy teetered on the brink of recession as low capital accumulation with an increasing rate of debt blocked the growth of aggregate demand. The article demonstrates how the forced restriction of economic activity in the pandemic caused a negative demand growth and the inadequate increase in government debt in the major world economies as to the level of interest and liquid reserves of state budgets that led to the transition of the world economy to the zone of negative GDP growth and employment rates. Variant calculations of economic and financial damage to the Russian economy have been made. The parameters of economic dynamics are estimated in connection with the introduced restraints of economic activity

Suggested Citation

  • Pavel Aleksandrovich Minakir, 2020. "Pandemic Economy: The Russian Way," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 2, pages 7-18.
  • Handle: RePEc:far:spaeco:y:2020:i:2:p:7-18
    DOI: https://dx.doi.org/10.14530/se.2020.2.007-018
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    References listed on IDEAS

    as
    1. Pavel Aleksandrovich Minakir, 2020. "Russian Economy: Between Crisis," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 7-23.
    2. Pavel Aleksandrovich Minakir, 2018. "Russian Crisis: Expectations Against Facts," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 7-15.
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    Citations

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    Cited by:

    1. Alexandr Alexandrovich Ermolenko & Stanislav Valeryevich Naumov, 2021. "Transformation îf the Relationship between Public Production and Consumption’ Means: The Imperatives of the New Reality," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 163-189.
    2. Dmitriy Aleksandrovich Izotov, 2021. "Economic Policy Responses to COVID-19 of the Northeast Asia Countries," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 3, pages 156-178.
    3. Sergey Y. Glazev & Violetta V. Arkhipova, 2022. "Russia, India, and China: Cooperation and New Role in the Development of International Relations," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 14(3), pages 301-318, September.
    4. Marina Yu. Malkina, 2021. "How the 2020 pandemic affected tax revenues in Russian regions?," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 16(2), pages 239-260, June.
    5. Pavel Aleksandrovich Minakir, 2020. "The Economy of the Pandemic: A Far Eastern Russian Aspect," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 4, pages 7-22.

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    More about this item

    Keywords

    stagnation; economic dynamics; crisis; economic activity; damage; institutions;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • F02 - International Economics - - General - - - International Economic Order and Integration

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