• V. Danilov-Danil’yan — Global Crisis as a Consequence of Structural Changes in Economy

• A. Oleynik — Minimizing Missed Opportunities: Modeling Relationships between the State and Business in Russia
• S. Chepel — How to Increase Efficiency of Economic Policy: Empirical Analysis of Government Institutions’ Role
• V. Popov — Concatenation of Circumstances or Historical Regularity?
• E. Rustamov — Principles of Evolutionary Modernization of Transition Economies

• M. Bodrikov — Classical Theory of Value: Modern Sense of Unsolved Problems
• M. Stolbov — The Evolution of Monetary Theories of Business Cycles
• K. Sonin, I. Khovanskaya — A Political Economy Model of a Research University

• B. Mazukabzova — The Role of Credit Default Swaps in the Global Crisis
• L. Khodov — Germany's Higher School Problems

Abstracts

Problems in the financial sector were at the core of the current economic crisis. Therefore, economic recovery will only become sustainable after taking care of the major weaknesses in the financial sector. This conclusion is relevant both for the US and UK — the two countries where crisis has started, and for other economies which financial institutions turned out to be fragile in the face of the swings in the risk appetite. Russia is one of the countries where the crisis has revealed serious deficiency in the financial sector. Our study of 11 banking crises during the last 25—30 years shows that sustainable economic recovery and decrease in the dependence on commodity prices will be virtually impossible without cleaning of balance sheets and capitalization of the financial sector.

The article considers the key issues of current development of the Russian banking sector. It summaries the main achievements of the Russian government and Central Bank anti-crisis management and submits possible variants of solving the problem of Russian banks’ bad debts. The ways of transforming the Russian banking sector and sources of its development at the regional level are also discussed.

The paper analyzes changes in the structure of the real sector of world economy that have increased economic instability and made the Keynesian methods inapplicable for suppressing the oscillation amplitude in economic cycle. The abrupt expansion of two segments in the service sector is noted: the debt derivatives market and entertainment industry. The global financial-economic crisis that started in 2008 cannot be attributed to the processes in the financial sphere alone it serves as a manifestation of general civilization crisis. Measures, analogous to the internalization of external effects, are proposed to mitigate the adverse impact of the hypertrophic development of new segments in the service sector on the world economic system and the civilization as a whole.

Power involves a number of models of choice: maximizing, satisficing, coercion, and minimizing missed opportunities. The latter is explored in detail and linked to a particular type of power, domination by virtue of a constellation of interests. It is shown that domination by virtue of a constellation of interests calls for justification through references to a common good, i.e. a rent to be shared between Principal and Agent. Two sources of sub-optimal outcomes are compared: individual decision-making and interactions. Interactions organized in the form of power relationships lead to sub-optimal outcomes for at least one side, Agent. Some empirical evidence from Russia is provided for illustrative purposes.

The paper analyzes the hypothesis of statistical significance of the institutional factor in the process of increasing the efficiency of economic policy in developing countries. It shows that expansion of domestic credits to private sector (aimed at increasing private investment activity including FDI) may bring about contrary results if corruption in the country is higher than the threshold level. The efficiency of anti-inflation policy in many respects depends on the quality of banking system: the higher it is the lower is the impact of money supply on inflation and vice versa. The main reserves of increasing efficiency of anti-inflation policy in the CIS countries are strengthening of banking potential and energy saving. The priority of institutions development measures as compared to selective measures of government support of separate sectors of economy is justified.

Why have many transition economies succeeded by pursuing policies which are so different from the radical economic liberalization (shock therapy) that is normally credited for the economic success of countries of Central Europe? First, optimal policies are context dependent, they are specific for each stage of development and what worked in Slovenia cannot be expected to work in Mongolia. Second, even for the countries with the same level of development reforms that are necessary to stimulate growth are different; they depend on the previous history and on the path chosen. The reduction of government expenditure as a share of GDP did not undermine significantly the institutional capacity of the state in China, but in Russia and other CIS countries it turned out to be ruinous. The art of the policymaker is to create markets without causing government failure, as happened in many CIS countries.

The article considers strategic issues of modernization of the transition economy. The analysis is based on the methodology of the World Economic Forum where special attention is paid to the sequence of the transformation stages. The main conclusion is that modernization should combine implementation of the governance mechanisms with the beneficial use of comparative advantages of the national culture. In fact, modernization of the transition economy should be evolutionary. It is precisely this course of development that is relevant for Azerbaijan which has successfully upgraded its economy in the recent years.

The article is devoted to the problem of heterogeneity of models of the classical value theory. Logical consistency of the production costs principle in the context of the circular analysis of commodity economy is proved. The logic of the classical theory of commodity economy is reconstructed and deficiencies of the methods of solving a price problem offered by classics are considered.

The article deals with the most influential monetary theories of business cycles, ranging from R. Hawtrey and F. Hayek’s descriptive models based on credit cycles to the financial accelerator concept worked out by B. Bernanke. The prerequisites, methodology and conclusions of the theories are analyzed in the context of broad research programs of scientific schools and economists who elaborated these concepts. The competition and convergence between conflicting monetary theories of business cycles are also described.

Hiring decisions are typically made by committees members of which have different capacity to estimate the quality of candidates. Organizational structure and voting rules in the committees determine the incentives and strategies of applicants; thus, construction of a modern university requires a political structure that provides committee members and applicants with optimal incentives. The existing political-economic model of informative voting typically lacks any degree of variance in the organizational structure, while political-economic models of organization typically assume a parsimonious information structure. In this paper, we propose a simple framework to analyze trade-offs in optimal subdivision of universities into departments and subdepartments, and allocation of political power.