Add to favorite
 
123
Subscribe to our Newsletters Subscribe to our Newsletters Get Daily Updates RSS
russian visa


Early Warning System for Recession
August 24, 2012 17:24


The Russian government is working on an early warning system against possible financial collapses. By autumn, the Ministry of Economic Development is going to roll out a risk monitoring system set to detect possible crisis developments and a package of rapid response steps.

Deputy Minister of Economic Development, Andrey Klepach, said the new system will rely on the so called ‘leading indicators’.

Concept

Identified by Wesley C. Mitchell and Arthur F. Burns in 1938, leading indicators have been studied and elaborated extensively as a key tool to predict recession. The list of top ten indicators usually includes, but is not limited to:

  1. Average weekly hours, manufacturing.
  2. Average weekly initial claims for unemployment insurance.
  3. Manufacturers’ new orders, consumer goods, and materials.
  4. Vendor performance, slower deliveries diffusion index.
  5. Manufacturers’ new orders, nondefense capital goods.
  6. Building permits, new private housing units.
  7. Stock prices, 500 common stocks.
  8. Money supply, M2.
  9. Interest rate spread, 10-year Treasury bonds less federal funds.
  10. Index of consumer expectations.

Custom-made

The Russian Ministry of Economic Development has been using a number of leading indicators for some time now, including the Purchasing Manag­ers’ Index (PMI), OECD statistics, forecasts provided by the Gaidar Institute, data on railway transportation volumes and power consumption figures.

“We conduct regular monitoring of these indicators at the moment. If there is a turning point, say, a drastic drop in oil prices, extremely high figures of capital flight, if the rouble or the stock exchange shrinking, we track down how these changes impact production and economy in general,” says Oleg Zasov, head of the ministry’s macroeconomic forecast department. He claims that by autumn the government will piece different indicators together to produce a comprehensive early warning tool. “We may re-arrange some of the existing indicators or invent our own,” he said.

The final list should include real-time indicators that are vital for the Russian economy, like oil prices, stock exchange figures, exchange market pressure (EMP), as well as weekly statistics – the industrial output index, trade surplus, budget balance and state bonds prices.

Doubts

Some experts have been pessimistic, however. They admit that leading indicators proved accurate, though not helpful in averting the 2008 crisis, but point to the fact that the new recession will most probably have a different nature. “The ministry needs new indicators, not the ones that were effective before,” says Sergey Tsukhlo, from the Gaidar Institute in Russia.

You can read a report on the effectiveness of leading indicators by Russia’s Higher School of Economics in English here.

 

 

 

 




Author: Mikhail Vesely

Tags: Russian economy Higher School of Economics    

Next Previous

You might also find interesting:

Russian Banks Issued More Than 334,000 Bad Loans Roman Abramovich's "Eclipse" has Enriched Germany for 400 Million Euros Big Data Regulation in Russia IFD Kapital Refused To Buy the Shares Of Russian Media Group The Wealth Of Russian Billionaires Increased By 26.9 Percent









Comment on our site


RSS   twitter      submit



TAGS:
US Magnitsky Act  Sts Peter and Pul Cathedral  Vladimir  Suzdal  Ski resorts  Serge Golovach  Igor Talkov  Russian circus  Dagestan  Russian oil companies  elections in Russia  Russian science  Landscape Painters  Folk Arts  St. Petersburg  Valeriy Karpin  Ivan Pokhitonov  Rosa Khutor  Active Travel  Ada Yakusheva  Russian scientists  Ust-Kut  Russian education  Mercedes-Benz Fashion Week Russia  Moscow  doping scandal  Russian souvenirs  Russian Cinema  Sports  Mitki  Catherine Park   Modern Russian Literature  Russian sanctions   Tomsk  Meyerhold Centre  Russian economy  Eduard Gorokhovsky  Russian nationalists  Solovki  Proton Accelerators  Star Light  Same-Sex Marriage  Russia  Russian opera  Buzz Barometer  Russian business  sanctions  Russian tourism  Russian Lakes  Exhibitions in Moscow 


Travel Blogs
Top Traveling Sites