On September 28, Andrey Polbin, Head of Macroeconomic Modeling Department, took part in the V international conference “Modern Econometric Tools and Applications – META2018”, held in the facility of Nizhny Novgorod campus of the National Research University Higher School of Economics on September 27-29, 2018.
Andrey Polbin delivered a presentation “Evaluation of a cyclic component of the GDP in Russian Federation under high dependence on trade conditions”.
In his presentation, he suggested to extend the model of non - observable components for decomposition of the GDP in the Russian Federation to trend, cyclic and seasonal models. The methodology assumes that the level of potential output of Russian economy depends on the level of trade conditions with oil prices used as proxy. The cyclic component of the output is correlated with shocks of the trade conditions and long term growth rate of potential GDP is described by a random walk process.
Andrey Polbin also mentioned that since economy is rated on potential level, possible measures of short term economic encouragement based on the mitigation of monetary policy seem to be unpractical.
In addition, he considered procedures of evaluation of the suggested model and shocks identifications, eventual existence of part – time employment and structural changes.
Text of the presentation is available here.