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This paper explores sources of the output collapse in Russia during transition. A modified growth accounting framework is developed that takes into account changes in factor utilization typical of the transition process. The results indicate that declines in factor inputs and productivity were both important determinants of the output fall. The contribution of the productivity drop was critical, but smaller than previously reported. Possible causes of the reduction in productivity are assessed using data on sub-national regions within Russia. Privatization and entry of private firms are found to have generated productivity gains, while lack of exit of unviable enterprises constituted a drag on efficiency.

Labor --- Macroeconomics --- Production and Operations Management --- Labor Economics: General --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Macroeconomics: Production --- Wages, Compensation, and Labor Costs: General --- Accounting --- Labour --- income economics --- Economic growth --- Total factor productivity --- Productivity --- Labor share --- Growth accounting --- Industrial productivity --- Labor economics --- Wages --- Economic development --- Russian Federation

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This paper analyzes the evolution of interregional income inequality during transition in Russia. The transition matrix approach reveals that between 1991 and 1997 income mobility tended toward a highly uneven long-term distribution with the majority of regions at low income levels and a minority of higher-income regions, in sharp contrast to pretransition times. The ordered logit analysis suggests that the more successful regions prospered on account of their natural resources, while continuing to resist economic reorganization by supporting traditional enterprises. The less-successful regions appeared trapped at low income levels due to uncompetitive industries and lack of resources needed for restructuring.

Macroeconomics --- Public Finance --- Personal Income, Wealth, and Their Distributions --- Aggregate Factor Income Distribution --- National Government Expenditures and Related Policies: General --- Fiscal Policy --- Public finance & taxation --- Personal income --- Income inequality --- Income distribution --- Total expenditures --- Fiscal stance --- National accounts --- Expenditure --- Fiscal policy --- Income --- Expenditures, Public --- Russian Federation

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Monetary and fiscal policies around the world are in better shape today than two decades ago. This paper studies whether financial globalization has helped induce governments to pursue better macroeconomic policies (the "discipline effect"). The empirical tests have two innovations. First, we recognize potential endogeneity of the observed capital flows in a given country and employ an instrumental variable approach that relies on the autonomous (global) component of the capital flows. Second, we recognize inherent discreteness in defining good versus bad macroeconomic policies and use a transition matrix technique to determine whether capital flows are effective in inducing substantial qualitative policy shifts. Our results suggest that, in spite of the plausibility of the "discipline effect" in theory, it is not easy to find strong and robust causal evidence. There is some evidence that financial globalization may have induced countries to pursue low-inflation monetary policies. However, there is no evidence that it has encouraged low budget deficits.

International finance --- Capital movements --- Globalization --- Global cities --- Globalisation --- Internationalization --- International relations --- Anti-globalization movement --- Capital flight --- Capital flows --- Capital inflow --- Capital outflow --- Flight of capital --- Flow of capital --- Movements of capital --- Balance of payments --- Foreign exchange --- International monetary system --- International money --- Finance --- International economic relations --- Econometric models. --- Budgeting --- Exports and Imports --- Inflation --- Public Finance --- Price Level --- Deflation --- Debt --- Debt Management --- Sovereign Debt --- International Investment --- Long-term Capital Movements --- National Budget --- Budget Systems --- Globalization: General --- Macroeconomics --- Public finance & taxation --- International economics --- Budgeting & financial management --- Government debt management --- Budget planning and preparation --- Prices --- Debts, Public --- Budget --- El Salvador

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This paper investigates the medium-term behavior of output following banking crises, and its association with pre- and post-crisis conditions and policies. We find that output tends to be depressed substantially following banking crises, with no rebound to the precrisis trend. However, growth does eventually tend to return to its precrisis rate, with substantial crosscountry variation in outcomes. The depressed path of output typically results from reductions of roughly equal proportions in the employment rate, the capital-to-labor ratio, and total factor productivity. Initial conditions that are strongly associated with medium-run output losses include the short-run change in output, the occurrence of a joint banking-and-currency crisis, and a high precrisis level of investment. Short-run fiscal and monetary stimulus is associated with smaller medium-run deviations of output and growth from the precrisis trend.

Banks and Banking --- Financial Risk Management --- Macroeconomics --- Production and Operations Management --- Financial Crises --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Foreign Exchange --- Institutions and the Macroeconomy --- Economic & financial crises & disasters --- Banking crises --- Total factor productivity --- Financial crises --- Currency crises --- Structural reforms --- Industrial productivity --- United States