NBER released a paper done by the Gaidar Institute researchers
International Department of Fiscal Sustainability of the Gaidar Institute together with researchers from RANEPA drafted for publication by NBER a paper1 on developing a model of general economic equilibrium for simulation of fiscal sustainability in the future taking account depletion of energy and demographic resources.
The model embraces Russia, the USA, China, India, EU and Japan, and Korea.
The paper concludes that in Russia by 2084, there will be total depletion of energy resources and the birth rate stopped growing, tax rates will go up. Sharp growth of tax rates will also take place in the USA, EU countries, and India. Moreover, this growth will by so high that its political expediency is in doubt taking account real tax receipts and tax avoidance risk.
The model also tests a set of economic policy scenarios which can be realized in response to significant and permanent decline of energy resources. Feasible measures allowing to simplify transition of Russian economy to new equilibrium comprise pension and tax reform as well as sharp increase of birthrate. Mentioned measures are not compulsory for the implementation by the government. However, lack of serious and timely steps will considerably aggravate the situation.
1 S. Benzell, Ye. Gorunov, М. Kazakova, L. Kotlikoff, G. Lagarda, К. Nesterov, А. Zubarev. Simulating Russia's Challenging Transition. NBER, Working Paper 21269.Mass media about research:
А. Shapobalov. Mineral resources will be deducted from salary. Kommersant, №113, 30.06.2015.
Tuesday, 30.06.2015