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Economic Consequences of the Coronavirus Epidemic in Russia Amid the World Experience

Economic Consequences of the Coronavirus Epidemic in Russia Amid the World Experience

Journal of Economic Regulation, , Vol. 11 (no. 2),

The short and long-term consequences of the coronavirus epidemic on the state of the Russia’s economy are considered. They are correlated with its influence on the economy of Western countries, primarily the United States. Thus, both similar and distinctive features are identified, determined by the aspects of their past development and the economic policy nature. The features of the Russia’s economy over the past 30 years include a huge reduction in GDP, a low percent of gross fixed capital formation, the dependence of the economy on oil prices, hypertrophy of the consumer services sector, the weakness of the real economy, and the degradation of human capital. Some weaknesses of the Russia’s economy have analogues in the US economy. The measures of the Russian state to alleviate the economy and the lives of citizens during the epidemic are analyzed. It is shown that they are relatively much smaller than in developed Western countries and least of all relate to the standard of living of the population, which will adversely affect the development of the economy in 2020 and the timing of its exit from the crisis. At the same time, the way out of the crisis in Western countries, especially the United States, is hindered by the huge size of their debts. The course of the economic crisis associated with the epidemic in Russia is analyzed. Attention is drawn to the fact that already in the 1st quarter there was a drop in GDP. Based on data on the economy development in April and understanding the nature of the Russia’s economy, society, measures to combat the crisis, the experience of other countries, GDP is predicted to drop in the 2nd quarter by 29% and by the end of the year by 13%. This will be the largest drop in the world. The measures to overcome the crisis are proposed. They aim to take advantage of the crisis to ensure sustainable and rapid economic development after the end of the epidemic. This refers to a drastic increase in the share of fixed capital formation in GDP due to incomes taxation of the most-affluent section of the society, tax exemptions and subsidies to the real economy.

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Institutions and Technological Progress

Institutions and Technological Progress

Journal of Economic Regulation, , Vol. 11 (no. 2),

One of the factors that influences the state of technological progress is the institutional structure of society. Institutions influence the economic process by creating a structure or social order of interactions between participants in production. Technological progress can be described as the process of creating a new combination of factors of production. The condition for creating such a combination is to create a form of social interaction between the participants of production that link the factors of production. The structure of social interaction generates private incentives differ from the incentives for modernization created by technical and economic conditions of production: the availability of alternative sources of income; lack of confidence and guarantees in the appropriation of its share of income; high cost of technical and economic modernization (transaction costs, losses associated with prohibitions, sanctions, etc.); values, routines, behavioral standards, the significance of which exceeds the value of production modernization. The motivation that is created by the technical conditions for modernization production is insufficient to create an incentive to invest in the existing institutional framework of production. The possibility of obtaining the income gains at the expense of technical modernization may not be of interest to economic agents. The border of technical progress is shifted below the level determined by technical and economic factors. The policy of industrial modernization implies the implementation of an adequate institutional policy and modernization of production. The functions of institutional modernization are to create an institutional environment that creates a structure of interaction between people on the basis of which there can be incentives for technological progress and conditions for such interaction, which is necessary for the creation of a new combination of factors of production.

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Human Economic Behavior and Social Efficiency

Human Economic Behavior and Social Efficiency

Journal of Economic Regulation, , Vol. 11 (no. 2),

Modern economic reality constantly raises the question of the correct ratio of material and non-material benefits of human decisions, financial and humanitarian components of choice and the possibility of strengthening the latter. These circumstances determined the purpose of the study. It is aimed at studying the relationship between the benchmarks of economic behavior of people and their standard of living, as well as determining relevant recommendations. The principle of methodological individualism is used as the main research approach, and the data from rating agencies and survey results have become a source of information. The work initially carried out a grouping of preferences of an economic person, noted by various economic schools, and on this basis the types of non-material motives of his behavior were identified. It is shown that the strengthening of the role of such guidelines, attention to the social and spiritual well-being of a person is also projected on the priorities of the state, the composition of its socio-economic tasks, the cultural, moral state of society. Which, in the end, affects the increase of social efficiency, which is in a significant degree the ethical category. In turn, such trends, the strengthening of social values have an impact on the implementation of the non-economic needs of the individual, the growth of his well-being, the level of human capital. Significant opportunities for the impact of society on human needs are demonstrated by comparing countries with a holistic and non-holistic culture. Taking these results into account, socially justified landmarks are considered as an influence option, pushing people to a certain model of choice, which at the same time helps to increase social efficiency. It is shown that the instillation of such standards of behavior can occur both through targeted measures of the state, carried out, for example, in line with the new paternalism or improvement of economic institutions, as well as public influence, national traditions, guidelines for self-identification, ethical values. A detailedization of the recommended norms of socially-oriented behavior and the mechanisms for their implementation in everyday life is the subject of further development of this study.

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Study of Decision-Making Mechanism of Economic Agents

Study of Decision-Making Mechanism of Economic Agents

Journal of Economic Regulation, , Vol. 11 (no. 2),

The article is devoted to the research, systematization and integration of economic knowledge in the aspect of analyzing the behavior of economic agents, as well as modeling the decision-making mechanism of economic agents. The problem of developing applied tools for modeling decision-making by economic agents, taking into account the results of the evolution of modern economic thought, is identified as a scientific goal. At the same time, the authors proceeded from the assumption that the study of the decision-making mechanism of economic agents inevitably involves the formulation of the rules of choice (algorithm), which they were guided by when performing this action. The research is based on the cognitive potential of behavioral and institutional Economics, the results of the theory of prospects, tools of expert survey, which allowed us to systematize economic knowledge in the context of the study of the decision-making mechanism of economic agents, as well as provide examples of modeling. Based on the cognitive potential of behavioral Economics, the application of the tools of behavioral Sciences in economic theory, the paper fixes the position that the choice of economic agents is subject to a sequence of causes and effects, in other words, the principle of causality (for example, based on existing consumer habits). The results of this study confirm the significant influence of institutional factors, habits, stereotypes formed from empirical experience, available information, and other factors that are not initially in the teleological focus of neoeconomical theory on decision-making by economic agents. The article systematizes the main conclusions of the research. The results obtained should later become the basis for the formation of a scientific basis for managing the behavior and choice of economic agents.

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Path Dependence and Narrative Economy: Paradoxality of Economic Objectivity

Path Dependence and Narrative Economy: Paradoxality of Economic Objectivity

Journal of Economic Regulation, , Vol. 11 (no. 2),

This article advocates a kind of bridge between narrative understanding of Economics and psychology economists and a bridge to the philosophy of economic science. The fact that economists used to think that they think more objectively than representatives of other social Sciences, as they generally explore the problem of choice and perspectives of other social Sciences in one way or another will be connected with choice. But the economics is not a static science, it is dynamic. Moreover, it is dialectical. So doubtful will be put in economics some boundaries. Economists in competition with sociologists, ethnologists, political scientists and other colleagues, as times violate the scientific nature of Economics, speaking about the objective, measuring its static units. Developing various new discourses in the economics it is important not to forget that there is the economics, it is important to remember about the true philosophy of economics. Example of narrative economics is very significant to realize the fact that the economics uses a dialectical form of knowledge, because of narrative economics – the product of economic imperialism, and consequently, an interdisciplinary field of study that, at least, tells us that the economic discourse may not have a single beginning. Moreover, the narrative economics is the continuation of another economics discourse of institutional economics. In particular, due to Path dependence. Revealing the narrative economics in this case is the fact that it has many beginnings, therefore, erroneous to assert that the economy uses the metaphysical forms of knowledge. The task of this article to dispel the myth of the “objectivity” of economists, forced to think about the true nature of economics and also to explain the origin of narrative economics, as a consequence opposite to the position of the economists of the phenomenon.

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Institute of Investment Forums: Advanced Foreign Experience

Institute of Investment Forums: Advanced Foreign Experience

Journal of Economic Regulation, , Vol. 11 (no. 2),

International investment forums are a relatively new institutional form of attracting capital to the economy of a country or region. At the same time, such events are already taking place in many countries and, given their scale, they occupy a significant place in the national investment policies of host countries. However, this institution has not received wide coverage in the domestic and foreign scientific literature and, in fact, remains almost unknown. Based on the analysis of the largest international investment forums, the article focuses on the key functions of investment forums: attracting investment resources and strengthening the business reputation in the international arena of national business, as well as the country as a whole. The main indicators of success of the forums, which are most often found in press releases published by the organizers of the event, are also given. Their totality is divided into three groups – indicators of social, political and financial performance. Based on the priority of key missions and the balance of performance indicators, a classification of investment forums is: forum-project competition; forum-conference; forum-solemn event and forum-exhibition. In the final part of the work, there are the directions for further study of the role of investment forums in national economies.

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Airshow as A Driver of Regional Development

Airshow as A Driver of Regional Development

Journal of Economic Regulation, , Vol. 11 (no. 2),

The article examines the largest international aviation and space salons, as well as Russian aviation events of regional significance through the prism of their impact on the development of the local economy. The analysis showed the leadership of the Moscow aerospace salon (MAKS, Zhukovsky, Moscow region) in terms of public attention to the event in comparison with similar sites in France, Germany and the UK, and, at the same time, its significant lag in the size of contracts for the purchase of aircraft. The thesis is substantiated that the high demand for the open part of MAKS is due to the internal shortage of air shows, as well as national interest in aviation, despite the low availability of personal air transport. The economic effect of holding MAKS cascades to the regions where aircraft manufacturing enterprises are located, and also remains in the city and region hosting the event. A regional map of aviation events has been compiled, including air shows held within the framework of open military, sports programs and private initiatives. The established chronology of private airshows in 2010-2020 identifies this segment as a growth point. The largest private initiatives manage to become business projects and attract up to 20 thousand viewers, further developing event tourism using the created infrastructure. The potential of regional high-class air shows was revealed by the corporate Red Bull Air Race, which took place in Kazan in 2017-2019 and numbered about 100 thousand spectators annually. Despite the lack of clarity in the sector's public policy, the increase in private initiatives to hold air shows at restored local airfields and public attention to them indicate the growing potential of domestic demand for affordable personal aviation. The organization of such a market, which is significant for the regions, is the responsibility of federal industry regulators and their controlled aircraft manufacturers.

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Video Content Popularity Prediction Using Machine Learning Methods

Video Content Popularity Prediction Using Machine Learning Methods

Journal of Economic Regulation, , Vol. 11 (no. 2),

This paper deals with the research problem of predicting the popularity of newly created video content. Machine learning task is represented by binary classification of videos into “popular” and “unpopular”. Based on the Pareto principle, the “popular” videos are those, which are part of the top 20% most viewed videos. The article provides an overview of studies on the video content popularity prediction problem by using methods of machine learning (including deep learning). The author explores the applicability of various modifications of existing methods to solve the research problem. The author also develops the new method based on a combination of the ensemble of trees and neural networks. Each method is tested on a sample of 11,000 YouTube videos data, which is collected by using a purposefully developed parsing software. Based on the tests results, it is suggested to use the method of combining tree ensembles and neural networks. The quality of prediction by using this method is characterized by the following metrics: 87% of videos are correctly classified (Accuracy); among the videos classified as popular, 63% are popular (Precision); 49% of truly popular videos are correctly identified (Recall). Research findings indicate characteristics that are most likely to influence the popularity of the newly created video: the number of views and dislikes of the last publi shed video on this channel; the number of channel subscribers; last video's publishing time; new video title; the channel establishment date. The limitations and directions for improving the method are outlined; the need for interdisciplinary research is proposed as encompassing the interests of marketers, data analysts, linguists and psychologists.

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Procurement in the Context of Conditions for Countries’ Institutional and Technological Development: an Empirical Analysis

Procurement in the Context of Conditions for Countries’ Institutional and Technological Development: an Empirical Analysis

Journal of Economic Regulation, , Vol. 11 (no. 2),

The paper focuses on use of cluster analysis in order to determine groups of countries similar to Russia in terms of their institutional and technological environment for public procurement. Indices on 139 countries in 2018 are analyzed. A technical approach is suggested to define the position of the Russian Federation relative to the countries with a market concept of procurement. Several stages of a sequential search of similar-to-Russia performance conditions for a pubic procurement system are described. Clustering is based on two groups of factors. Technological parameters in accord with the findings of international studies include the expenditure share on public consumption and national defence in GDP, GDP growth rate, rate of urbanization and human development index. To account for the quality of the institutional environment factors that directly influence public procurement conditions, we apply data on Corruption Perception Index and Ease of Doing Business Index. A list of countries similar to Russia on particular groups of indices as well as group overlapping is given. Conclusions highlight the difference between the Russian Federation and a group of developed countries that formed the basic international principles of public procurement systems.

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