CREES Noon Lecture. “Escaping the Poverty Trap: Economic Convergence between Russian Regions in the 1990s and 2000s.”
Professor Guriev will discuss convergence – the hypothesis that poorer economies’ per capita income will grow at faster rates than richer economies – among Russian regions. His findings indicate that while there was no convergence in the 1990s, the situation changed dramatically in the 2000s. While interregional GDP per capita gaps still persist, the differentials in incomes and wages decreased substantially. The data shows that fiscal redistribution did not play a major role in convergence, and therefore his study looks at panel data on the interregional reallocation of capital and labor to try to understand the phenomenon of recent convergence. Guriev finds that capital markets in Russian regions are integrated in such a way that local investment does not depend on local savings, and that economic growth and financial development has substantially decreased the barriers to labor mobility. While during the 1990s many poor Russian regions were in a poverty trap, in which potential workers wanted to leave those regions but could not afford to finance the move, by the 2000s (especially the late 2000s), these barriers were no longer binding because overall economic development allowed even the poorest Russian regions to emerge from these poverty traps. In this lecture, Guriev will compare the interregional gaps in incomes, wages, and unemployment rates in Russia and Europe, and explore how economic growth and development of financial and real estate markets affect the potential for convergence.
Sergei Guriev is professor of economics and Rector at the New Economic School in Moscow, where he is also president of the Center for Economic and Financial Research. Guriev’s research interests include contract theory, corporate governance, and labor mobility. He teaches graduate courses in microeconomic theory, contract theory, and economics of strategy. Guriev has published in international refereed journals including American Economic Review, Journal of European Economic Association, Journal of Economic Perspectives, and American Political Science Review.
Part of the series Pluralism in Politics and Culture, a new initiative jointly sponsored by CREES and WCED that examines the foundations of free and open societies. The project builds on the university’s rich legacy of study and support of the dissident culture in the former Soviet Union and on several existing efforts at U-M. The series focuses on multiple facets of political pluralism, including its legal, cultural, and economic dimensions, and explore them in a broader historical context.
Sponsors: CREES, Department of Economics, WCED
Sergei Guriev, professor of economics; president, Center for Economic & Financial Research; rector, New Economic School