The paper deals with Russian economic development and economic policy in 2015—2016. The analysis is focused on external and domestic challenges as well as on anti-crisis policy of the Russian government. Special attention is paid to key elements of a new model of economic growth in Russia. The paper discusses priorities of economic policy of sustainable growth including: budget efficiency, structural reforms and import substitution, stimulation of entrepreneurship, efficiency of public administration, modernization of welfare state.

JEL: E02, E60, E61, H10, H11, H12, H50, H60, O10.
Keywords: economic policy, economic growth, import substitution, global crisis, anti-crisis policy, Russia.

The authors examine the dynamics of regional budgets performance key indicators, including analysis of "May decrees" implementation effects. Interregional differentiation of budget deficit levels is regarded in details. The article contains estimation of the impact of various factors on regional budget performance, and the analysis of the relationship between budget balance and budget debt.

JEL: H51, H52, H53, H62, H63, H74.
Keywords: fiscal balance, regional budget, regional debt, presidential decrees.

The article studies the role of subventions, one of the major types of intergovernmental transfers, in the Russian system of fiscal federalism. The authors demonstrate the structure, dynamics and major trends in the development of subventions over the last 15 years. The new typology of subventions, based on three criteria (financial volume, complexity of the procedure of determining the subvention value, frequency of changes made in these procedures), as well as the detailed classification of the major types of subventions is presented in the article. Finally, the authors draw conclusions on the future of subventions as an element of the Russian fiscal federalism.

JEL: H70, H77.
Keywords: subventions, intergovernmental transfers, fiscal federalism.

The article substantiates the need for regionally differentiated innovation policy based on the principles of smart specialization. It provides an extensive review of international experience and literature and proposes guidelines for a new policy relating to the conservation of the human capital, the formation of innovative businesses and the intensification of horizontal connections. Using the cluster analysis, the authors develop a typology of regions and cities for innovation policy goals. The article suggests support tools for each type of regions, which are different in the potential of creation and implementation of new technologies, technological and industrial specialization.

JEL: O2, O31, R3, R5.
Keywords: innovation policy, Russian regions, regional policy, smart specialization, human capital, entrepreneurship, regional typology.

A growing body of empirical work measuring different types of cultural traits has shown that culture matters for a variety of economic outcomes. This paper focuses on one specific aspect of the relevance of culture: its relationship to institutions. We review work with a theoretical, empirical, and historical bent to assess the presence of a two-way causal effect between culture and institutions. The first part of the paper provides the main definitions and discusses the difficulties associated with the quantitative analysis of this effect. It also features a map of cultural traits used in economics and of their correlations.

JEL: D02, D72, I32, J12, Z13.
Keywords: culture, values, institutions.

The article surveys the literature that emphasizes the importance of comparative and absolute advantages for intra- and inter-industry trade. Two conclusions follow form the survey. First, unlike the traditional view, intra-industry trade is determined rather by technology than by increasing returns. Second, absolute advantages that have been ignored in international trade models for a long time play a vital role through their linkages with product quality and export diversification. We also discuss a new strand of literature that models international trade with the assumption of non-homothetic preferences.

JEL: F10, F11, F12, F19.
Keywords: intra-industry trade, inter-industry trade, comparative advantage, absolute advantage, export diversification, product quality.

Positive impact of human capital on economic growth seems to be undisputable but its magnitude depends on to what extent high quality education and skills are demanded and valued by the labour market. This essay argues that the lack of demand for human capital cannot be cured by growing supply if other things remain intact. The author formulates 10 doubts concerning human capital absorption in the Russian economy. These doubts, supported by statistical and anecdotal evidence, relate to low quality of the Russian institutional environment which limits demand for labour and distorts its structure.

JEL: J24, P20.
Keyworlds: human capital, demand for labour, institutions, Russian economy.

The economic future of Europe depends on the combination of many processes, not only strictly economic ones. Currently, the situation is becoming quite complicated, with a number of particularly adverse tendencies overlapping and mutually strengthening one another. Adding to the classical problems involving the economic slowdown, high unemployment rate and insufficient innovation of the European economy, is the immigration crisis, the escalating terrorist threat and Brexit, as well as the risk of Grexit. The potential overlapping of Brexit and Grexit could be fatal for European integration. Solving the Greek syndrome requires a radical change in the way the European Union, especially Germany, approaches this problem. On the one hand, specific structural reforms and fiscal adjustments are necessary in Greece, but on the other hand, there’s a necessity for a conditional reduction of the Greek public debt by half. What is needed in the long run, is to ensure that some countries’ surpluses are not financed with others’ deficits and debts.

JEL: E02, E61, F45, H12, H63, P20.
Keyworlds: European Union, Eurozone, economic policy, crisis, public debt, austerity, Grexit, Brexit, Galbraith.