The Influence of Oil and Gas Revenues on Russia's Monetary and Credit Policy
This article examines the problems of implementing monetary and credit policy when there is significant flow of currency revenues from the export of raw materials. It argues that, given a strong balance of payments, the Central Bank has to accept either a strengthening of the rouble or inflation. Only the RF Government has the power to prevent an appreciation of the currency whilst at the same time controlling inflation. This dual task can be achieved by saving, when external economic conditions are favourable, a share of the revenues from oil and gas in reserve funds. Such a policy can create the foundations for macroeconomic stability and a favourable investment climate.
Collapse of an Empire: Lessons for Modern Russia
My goal is to show the reader that the Soviet political and economic system was unstable by its very nature. It was just a question of when and how it would collapse...-From the Introduction to Collapse of an Empire The Soviet Union was an empire in many senses of the word -a vast mix of far-flung regions and accidental citizens by way of conquest or annexation. Typical of such empires, it was built on shaky foundations. That instability made its demise inevitable, asserts Yegor Gaidar, former prime minister of Russia and architect of the "shock therapy" economic reforms of the 1990s. Yet a growing desire to return to the glory days of empire is pushing today's Russia backward into many of the same traps that made the Soviet Union untenable. In this important new book, Gaidar clearly illustrates why Russian nostalgia for empire is dangerous and ill-fated: "Dreams of returning to another era are illusory. Attempts to do so will lead to defeat." Gaidar uses world history, the Soviet experience, and economic analysis to demonstrate why swimming against this tide of history would be a huge mistake. The USSR sowed the seeds of its own economic destruction, and Gaidar worries that Russia is repeating some of those mistakes. Once again, for example, the nation is putting too many eggs into one basket, leaving the nation vulnerable to fluctuations in the energy market. The Soviets had used revenues from energy sales to prop up struggling sectors such as agriculture, which was so thoroughly ravaged by hyperindustrialization that the Soviet Union became a net importer of food. When oil prices dropped in the 1980s, that revenue stream diminished, and dependent sectors suffered heavily. Although strategies requiring austerity or sacrifice can be politically difficult, Russia needs to prepare for such downturns and restrain spending during prosperous times. Collapse of an Empire shows why it is imperative to fix the roof before it starts to rain, and why sometimes the past should be left in the past.
The economics of the open university revisited
Revision of earlier cost calculations for the Open University and Conventional Universities in the U.K. for 1973 confirms the findings of a significant cost advantage to the Open University. An analysis of developments at the Open University since 1973 indicates, however, that there has been little reduction in average cost in real terms and no improvement is likely on known developments to 1979. This is surprising for it might be expected that as student numbers rise average costs would fall. A more detailed analysis of the structure of Open University costs indicates why this has not happened. A major determinant of costs is the number of courses and these have continued to grow rapidly since 1973. The rate of increase of new courses has been faster than the rate of increase of new students. In effect the University has been using the economies provided by increased student numbers to increase student choice through the provision of more courses rather than reduce average cost.Average cost could be reduced whilst keeping the same number of courses by changing the components of the teaching system such as broadcasting. If such fundamental changes were not acceptable then an alternative would be to change the mix of courses between the relatively expensive science and technology areas and the cheaper arts and social science areas. A further alternative is to keep the same mix but ensure a longer life for science and technology courses.