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• E. Yasin — Modernization and Society

• V. Popov — Shock Therapy versus Gradualism: 15 Years Later
• S. Tsirel — On the Dependence of Economic Growth on Government Intervention and Social Inequality

• P. Klyukin — Revision of the Neo-Ricardian Theory of Value and Distribution: New Evidence and New Perspectives
• M. Bodrikov — Neo-Ricardian Theory of Value and Distribution: A Critique

• IE RAS Seminar «Theoretical Economy»

The author argues that Russia needs modernization. Its essence is in the transition to the new economy. But the main factor which is necessary in this respect is modernization of social institutions. Russian society is not mature enough for the modernization. One needs to take measures in order to promote public confidence and social activity. The reforms require therefore a lot of investment, including public investment, into the transformation of social institutions.

The paper analyzes the present conditions of the Russian economy, existing and possible directions of its evolution in the context of global long-term development tendencies. Proceeding from the regularities of contemporary economic growth, the main problems and threats to the Russian economy development as well as the consequences of continuing tendencies of its structural degradation are assessed. A set of proposals for the formation of economic growth policy is substantiated. These proposals take into account the need to overcome existing disproportions and problems, possibilities of the activation of the competitive advantages and sources of growth.

The article considers the main tasks of investment re-orientation of the Russian economy; the focus is made on the innovation character of investment process, including the strengthening role of state innovation abilities as an extra factor of foreign investment incentives. The financial and organizational aspects are stated which can help activate the Russian innovational development, and the growth of its contribution to the basic reconstruction of national economy is investigated. Special attention is paid to the importance of principal methods of state adjustment for innovation and investment processes in the Russian economy, taking into account the provision of distinct balance between interests of the federal center and regions. The definition of state investment policy is presented and the main tasks of the said policy are made clear. The significance of more active development and state support of venture financing is stressed which can allow attract investment resources to the field of innovation research.

The article considers the budget policy as an instrument of promoting stable economic growth and smoothing economic disparities. The author classifies the goals of budget policy, making accent on the efficiency of government expenditures and the status of targeted and investment programs in the budgeting methodology. The article also analyzes the influence of stabilization fund on money supply, consumption price index and GDP growth rate.

This paper starts by separating the transformational recession from the process of economic growth (recovery from the transformational recession) in 28 transition economies (including China, Vietnam and Mongolia). It is argued that the collapse of output during transition can be best explained as adverse supply shock caused mostly by two factors: change in relative prices after their deregulation due to distortions in industrial structure and trade patterns accumulated during the period of central planning; collapse of state institutions during transition period that worsened the investment climate. The speed of liberalization, to the extent it was endogenous, i.e. determined by political economy factors, had an adverse effect on performance as the 2SLS estimates suggest. In contrast, at the recovery stage the ongoing liberalization starts to affect growth positively, whereas the impact of pre-transition distortions disappears. Institutional capacity and reasonable macroeconomic policy, however, continue to be important prerequisites for successful performance.

On the basis of international statistics (WB, OECD, WEF) it is shown that the correlation between GDP per capita growth and government outlays is undergoing complex oscillations. The weak positive correlation of the 1970s gave way to a distinctly negative correlation of the 1980s. However, since the beginning of the 1990s the correlation has been subsiding. During the present decade the correlation has been at its lowest significance in the highly developed countries; in the countries similar to Russia it is, in fact, nil. The basic cause of it is the combination of the positive influence of the government support of R&D and the negative influence of high taxes together with financing non-effective enterprises. The correlation between economic growth and the degree of income discrepancy is also subject to the oscillations. At present the absence of correlation in highly developed countries and negative correlation in countries similar to Russia is noted. The decisive factor of correlation is the positive influence of human capital investment and, at the same time, differentiation of pay.

The article is devoted to historical and theoretical analysis of origins and perspectives of the neo-Ricardian theory as a special scientific approach to economic analysis. The author considers the works of Russian economists such as M. I. Tugan-Baranovsky, V. K. Dmitriev, N. N. Shaposhnikov and V. I. Bortkiewicz. He analyzes the development of their views, their mutual influences and the role of Marxian political economy in the historical development of neo-Ricardianism. Drawing from the archival evidence the article shows that the Russian tradition in political economy is in many respects an anticipation of the works of P. Sraffa and neo-Ricardian theory as a whole.

The article considers the main propositions of Neo-Ricardian interpretation of the classical approach to the problem of pricing. The author shows that in normal (long-term) economic conditions commodity prices do not depend on the conditions of income distribution. The impossibility to explain rate of profit within the framework of the model of «standard system» is shown. The author concludes that neo-Ricardian «price distribution effects» and criticism of Neoclassical concept of capital are incorrect.