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   Course Title    Economics of Transition
Lecturer    Vladimir Matveenko
Institution    European University of St. Petersburg
Country    Russia


This half-semester course (student’s choice) is proposed for the 2nd year of the Master Program

Department of Economics, European University at St. Petersburg (www.eu.spb.ru)

The aim of the course is to present to students some basic facts related to the dynamics of transition in Central and Eastern Europe and Russia as well as theoretical models proposed by Western and Russian economists and explaining these dynamics. Students may use a source of quantitative characteristics of today Russian Economy Russian Economic Trends: Monthly update (published by Russian-European Centre for Economic Policy in cooperation with the Working Centre of Economic Reforms Government of the Russian Federation). Students will sit for a three hours exam after the course.

CONTENT OF THE COURSE:

1. Short characteristics of the economy of USSR and Soviet satellites. Period of zastoi (depression). Economy of deficit (scars goods). Black market.

Khanin G. (1991) Dynamics of economic development of tthe USSR. Novosibirsk: Nauka. (In Russian).

Stahl D.O., Alexeev M.A. (1985) The influence of black markets on a queurationed centrally planned economy. J. of Economic Theory, 35(2).

Lipton D., Sachs J. (1990) Creating a market economy in eastern Europe: The case of Poland. Brookings Papers in Economic Activity, 1, 75-147.

Polterovich V.M. (1993) Rationing, queues and the black markets. Econometrica, 61(1), 1-28.

Easterley W., Fisher S. (1995) The Soviet economic decline: historical and republican data. NBER

Matveenko V. (1989) Plan and market control mechanisms in models of economic dynamics. Leningrad: Institute for Socio-economic Problems Russian Academy of Sciences (In Russian).

2. Plans anf forecasts before the reforms. Earlier experiences of privatization, liberalization, and stabilization in industrial and developing economies. Theoretical basis: rational expectations and the IMF orthodoxy. The order of economic reforms. Opinions of Kornai and Soviet economists.

Kornai J.. (1990) Road to a free economy. New York, London: Norton.

Kornai J. (2000) The road to a free economy – Ten years after. Transition: The Newsletter about Reforming Economies, 11(2)

Schmidt-Hebbel K., Serren L., Salimano A. (1994) Saving, investment, and growth in development countries. Policy Research Working Paper 1382, November 1994. The World Bank.

Matveenko V. (1989) Plan and market control mechanisms in models of economic dynamics. Leningrad: Institute for Socio-economic Problems Russian Academy of Sciences (In Russian).

Polterovitch V. (1990) Economic equilibrium and economy mechanism. Moscow: Nauka (In Russian).

3. Privatization. Restructuring. Critical Mass Effect.

Matveenko V., Vostroknoutova K., Bouev M. (1998) Transformational decline and preconditions of growth in Russia. Working Paper series, 98/03, EERC/Eurasia Foundation.

Matveenko V. (1999) Labour market, economy restructuring, and prospects for economic growth in Russia. Web journal Polemics, N 5, http:/www.irex.ru/publications/polemika/5/art1.htm (in Russian).

Drazen A. (2000) Economic reform and transition. Ch. 13 from A.Drazen, Political economy in macroeconomics. Princeton: Princeton University Press.

Sacco P.L., Scarpa C.(2000) Critical mass effect and restructuring in the transition towards a market economy. European economic Review, 44, 587-608.

4. Running reforms. Review of economic dynamics in Central eastern Europe and in Russia. Alternative explanations of the transformational recession

Aghion P., Blanchard O.J. (1994) On the speed of transition in Central Europe. NBER Macroeconomic Annual, ed. By S. Fischer and J.J.Rotemberg. Cambridge: MIT Press, 283-320.

Roland G., Verdier T. (1997) Transition and the output fall. CEPR Discussion Paper N 1636.

Blanchard O., Kremer M. (1997) Disorganisation. Quart. J. of Economics, 112 (1), 1091-1126.

Matveenko V., Vostroknoutova K., Bouev M. (1998) Transformational decline and preconditions of growth in Russia. Working Paper series, 98/03, EERC/Eurasia Foundation.

Matveenko V. (2000) A model of price liberalization leading to transformational recession. In: Economic research: mathematical methods and information technologies. St. Petersburg: Nauka. I(n Russian)

5. The role of interest groups. A case: choosing the degree of external trade liberalization (import substitution vs export orientation).

Alesina A., Drazen A. (1991) Why are stabilizations delayed? American Economic Review, 81, 1170-1188.

R.Fernandez, D.Rodrik (1991) Resistence to reform: status quo bias in the presence of individual specific uncertainty. American Economic Review, 81, 1146-1155.

Dewatripont M., Roland G. (1992) Economic reform and dynamic political constraints. Review of Economic studies, 59, 703-730.

Rodrik D. (1996) The dynamics of political support for reforms in economies of transition. CEPR Discussion Paper N 1339.

Tornell A. (1998) Reform from within. NBER Working Paper 6497.

6. Role of social capital Rent seeking and rent extraction. Corruption.

Matveenko V. (1995) Development with positive externalities: the case of the Russian economy. J. of Policy Modeling, 17(3), 207-221.

Mauro P. (1995) Corruption and growth. Quart. J. of Economics, 110, 681-712.

Bardham P. (1997) Corruption and development: A review of issues. J. of Econ. Lit., 35, 1020-1046.

Tornell A., Lane P. (1998) Are windfalls a curse? A non-representative agent model of the current account anfd fiscal policy. J. of International Economics, 44, 83-112.

Zaostrovtsev A. (2000) Rent extraction in a rent-seeking society. SPIDER Working Paper Series N 10. Stockholm University and St.Petersburg State University.

Paldam M. (2000) The cross-country pattern of corruption. Mimeo, Aarhus University, Denmark.

7. Role of natural resources abundance.

Rodriguez F. (1999) Inequality, redistribution and rent-seeking. Working Paper. Department of Economics, University of Maryland.

Gylfason T., Zoega G. (2001) Natural resources and economic growth: the role of investment. CEPR Discussion Paper N 2743.

Stijs J.-P. (2001) natural resources and economic growth revisited. Mimeo. SSRN 264878.

8. Comparison of labour markets in Central Eastern Europe and in Russia. Sectoral shifts of labour. Labour hoarding.

Commander S., Coricelli F., eds. (1995) Unemployment, restructuring, and the labor market in eastern europe and Russia. EDI Development Studies.

Matveenko V., Vostroknoutova K., Bouev M. (1998) Transformational decline and preconditions of growth in Russia. Working Paper series, 98/03, EERC/Eurasia Foundation.

Clarke S., ed. (1998) Structural adjustment without mass unemployment? Lessons from Russia. Cheltenham: Edward Elgar.

Boeri T. (1999) Transition with labour supply. 5th Nobel Symp. in Economics.

Matveenko V., Saveliev P. (2000) Fiscal policy and labour market institutions. SPIDER Working Paper Series, N 8, Stockholm University.

9. Financial crisis 1998. General scheme of a currency crisis. Methods of exchange rate regulation. Is currency board possible in Russia?

Barro R.J. (1998) What might save Russia; tying the ruble to the dollar. BusinessWeek, 28 September, 24.

The ABC of currency board. (1997) Economist, 1 November, 96.

Soros J. (1998) The crisis of global capitalism [Open Society endangered] New York: Public Affairs.

10. The role of the shadow economy.

Dallago B. (1994) The irregular economy in transition: features, measurement and scope. In: Holtzmann R., Gaes J., Winkler G., eds. Output decline in Eastern Europe, unavoidable, external influence or homemade? Luxemburg, IIASA.

Matveenko V., Vostroknoutova K., Bouev M. (1998) Transformational decline and preconditions of growth in Russia. Working Paper series, 98/03, EERC/Eurasia Foundation.

Johnson S., Kaufmann D., Mc Millan J., Woodruff C. (1999) Why do firms hide? Bribes and unofficial activity after communism. 5th Nobel Symposium in economics.

11. Institutional traps. Barter and "virtual economy’.

Polterovich V.M.. (1998) Institutional traps and economic reforms. New Economic school Working Paper N 98/004.

Aukutsionek S. (1998) On types of barter. Russian Economic Barometer, 7(2).

Gaddy G.C., Ickes B.W. (1998) Russia’s virtual economy. Foreign Affairs, Sept.-Oct., 53.

Chang H.G.(1998) The nature of Russia’s virtual economy. Mimeo.

Ickes B., Ericson R. (2000) A model of Russia’s virtual economy. Mimeo. http://econ.la.psu.edu/~bickes/fest4.pdf

Marin D. (2000) Trust vs illusion: What is driving demonetization in Russia? Mimeo.

12. Economic policies in to-day Russia.

Discussion of current questions of economic policy. Students have to explain and predict decisions of the government and forecast their short-run and long-run consequences.



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