FINANCIAL SECURITY IN THE ECONOMIC SECURITY SYSTEM OF THE RUSSIAN FEDERATION

This article examines the concept of financial security of the state. The article is also devoted to the consideration of the main problems that act as threats to the financial security of the country. The problem of servicing the state external and internal debt, as well as capital outflow from the country is considered in more detail. Statistical data on the problems voiced are presented. The consequences of ignoring these problems are analyzed

The impact of a political shock on foreign exchange markets in a small and open economy: A dynamic modelling approach

This paper aims to analyse the dynamics of foreign exchange markets in a country facing political uncertainty that prompt capital outflow from the country1. The economic environment under investigation is characterized by dual foreign exchange markets: a formal or official market for foreign exchange with insufficient and volatile foreign exchange flows, and a strong and thriving informal market, with a higher exchange rate2. The findings in the paper indicate a necessary condition for stabilization of the exchange rate system and that is that the return on investment should exceed the depreciation rate of domestic currency in the formal foreign exchange market. This condition implies that the return on investment should at least compensate investors for the opportunity cost of holding domestic money in their private portfolio wealth. Our findings also indicate that stability of the foreign exchange rates is more difficult to achieve under insufficient official reserves as the recovery process from a shock becomes more costly in terms of time period needed for the adjustment process to complete. The dynamic path of the foreign exchange premium shows that under massive capital outflow caused by economic sanctions, the informal market exchange rate overshoots the equilibrium stationary exchange rate, and the size of such overshooting depends on the size of available foreign exchange reserves held by the central bank.

Debatable Aspects of Progressive Taxation of Individual Incomes in Russia

The present research deals with debatable aspects connected with introduction of progressive taxation of individual incomes in this country. In spite of the fact that in 2021 an attempt was made to introduce the progressive scale on income tax, different political parties put forward their own approaches substantiating them by demonstrating their regulating impact on economy. It is necessary to realize that progression in taxation involves not only the scale alteration. Today the possibility of progressive tax introduction is being discussed on the background of cutting their number in the fiscal system. In fact such innovations, despite their advantages, could have irrevocable consequences. Among key threats we can mention an increase in the shadow share of economy; administration challenges connected with labour intensity and extra costs; growing capital outflow abroad; general drop in economy competitiveness due to declining entrepreneurial urge towards profit maximization, etc. The article systematizes approaches presented by political parties for discussion and structures the author's approach to introduction of progressive rates based on generalized experience of best practices, adapted to Russian reality. The results of practical testing of authors' vision illustrated by income tax by different rates gives an opportunity to compare the tax burden, which can be estimated in order to enlarge citizens' groups with different levels of incomes.

Offshoring as a Threat to the National Economic Security: Causes and Ways to Counteract

The volume of capital outflows from Ukraine to offshore jurisdictions has become quite large and poses a threat to the economic security of the state, however, measures to de-offshorise the economy are not effective. Therefore, this study is aimed at identifying factors that affect the level of offshoring of the economy, in addition to the state's tax policy, and at developing measures to de-offshorise the state economy. The study used general and special methods of cognition, economic, mathematical, and statistical analysis, the method of deduction and theoretical generalisation. A theoretical analysis of offshoring as an economic category is carried out, the scale of offshoring of the world economy and its impact on the economic security of the state is determined, which substantiated the relevance of the chosen research topic. The main factors influencing the level of offshoring of the economy, except for tax evasion, are highlighted. A methodology and algorithm for determining the total amount of capital outflow are proposed and calculations of the total amount of capital outflow from Ukraine for 2013-2019 are carried out. A correlation analysis was carried out to determine the level of influence of certain factors on the offshoring level of the Ukrainian economy. A mathematical model of the influence of these factors is constructed (x1 , x2 ... xn ) at the level of offshoring of the economy (y), which allowed identifying the factors that most contribute to the increase in the volume of capital outflows from Ukraine. A comparison of the level of corporate raiding, the coefficient of offshoring and the volume of capital outflow from Ukraine is carried out, and a conclusion is made about their stable interdependence. Based on the results of the study, the main ways of de-offshoring of the Ukrainian economy in the process of creating and forming the Bureau of Economic Security of Ukraine are developed. It is proposed to create a division within the specified bureau that will perform the functions of countering raiding and violation of property rights of business entities. It is assumed that these measures would contribute to the de-offshoring of the economy and ensure the economic security of the state. The findings of the study can be used to form legislative and institutional support for deoffshoring and ensure the economic security of the state. In particular, based on the results, it is recommended to form the main directions of work and functions of the newly created Bureau of Economic Security of Ukraine

The Capital Flow Volatility Spillover in Some Selected African Economies

Purpose: The study conducted an empirical examination of the link between capital flows and exchange rate by examining the relative influence of FDI and FPI on the exchange rates. Method: The study proceeded with the EGARCH model and the data sample covering the period from 1990-2016. The data were subjected to cross-country screening. The screening criteria are such that all the data that constitute capital in all sampled countries must have equal sample sizes. The measurement of capital flow in each of the sampled countries was restricted to two categories capital, namely, foreign portfolio investment (FPI) and foreign direct investment (FDI). Results: The research establishes that the behavior of capital flow volatility spillover of the sample countries' currencies exchange rate differs, with only South Africa's and Morocco's currencies revealing some slight similarity and existence of asymmetric volatility spillover from capital flows to exchange rate. Additionally, the study discloses that capital flows spillover has a considerable effect on exchange rate volatility than harmful spillover. The study also observed that positive shocks associated with capital flow volatility affect exchange rate value in Botswana more than capital outflow. Further positive capital flow spillover impending from capital inflow has a considerable effect on exchange rate volatility than the harmful spillover impending from the capital outflow. Further, the positive capital flow spill over impending from capital inflow significantly affects exchange rate volatility more than the negative spillovers that emanate from the capital outflow. Implications: This suggests that the monetary policy should consider options that can accelerate capital flow into the Moroccan economy. However, in South Africa for any given quantum of capital flow into the economy, the South African Reserve Bank must use instruments to affect stability; otherwise, the currency exchange rate could remain unstable. Thus, capital withdrawals out of the Egyptian economy will create domestic currency instability. Keywords: Spill-over, Foreign Direct Investments (FDI), Portfolio Investments (PI), asymmetric, capital flow volatility, Exchange rate volatility.

Dynamic Spillover Effects between the US Stock Volatility and China’s Stock Market Crash Risk: A TVP-VAR Approach

Due to the increasing linkage of China and the US stock markets today, we constructed a TVP-VAR model to study the dynamic spillover effects between the US stock volatility and China’s stock market crash risk. We found dynamic spillover effects are constantly strengthening between US stock volatility and China’s stock market crash risk: when the US stock volatility increases, China’s stock market crash risk increases. In addition, the gradual improvement of financial market openness in China, the short-term capital outflow from China, and the depreciation of the RMB exchange rate will increase China’s stock market crash risk. And, the impacts of short-term capital outflow from China are more significant. Further, the increase in China’s stock market crash risk will lead to the decline of the US stock volatility, which may be due to the flight to quality.

METHODOLOGY OF INVESTMENT SYSTEM RESEARCH IN THE ASPECT OF UNPRODUCTIVE CAPITAL OUTFLOW: EXAMPLE OF UKRAINE AND INTERNATIONAL DIMENSION

The relevance of the topic of development of theoretical and methodological approaches to investment system regulation under influence of unproductive capital outflow is justified by significance of financial capital movements from groups of countries to others, caused by inappropriate institutional support for strategic investments. Aim of the proposed research is the development of methodological approaches to study and regulation of investment system development that allow to provide analysis of actual modern tendencies of investment system development, to estimate the influence of capital outflow on financial provision of investment process and to design regulating framework for shortening of unproductive financial capital outflow. The work is dedicated to research of theoretical, methodological and applicable basis of investment system development regulation in aspect of reducing of unproductive financial capital outflow with calculation of possible effect from involvement of reduced volumes of capital outflow into investment process. The research methodology, which is based on sustainable development and principle of balance of the stakeholders’ interests, includes approaches of system, theoretical and empirical analysis that allows us to identify the sense and structure of investment system in a sample of Ukraine and other 11 countries. Due to the statistical and econometric methods the estimation of the dynamics and regularities of capital investments are explored and the role of financial capital outflow in economic development of the country is estimated as percentage of GDP and as potential implicit resource that can be involved in investment process. The authors propose the methodology of investment system research and regulating from positions of institutional support embittering for renewal of invested capital and for attraction of new strategic investors. The provided systematization of theoretical positions in the sphere of investments and capital migration allows to obtain the definition of sense of investment system, to discover the regularities of its development and to identify the phenomenon of unproductive outflow of financial capital. It is found that the main criteria of unproductivity of capital outflow is excess of losses and expenses for national economy, caused by such migration of resources, under possible benefits. Conclusion. The hypothesis of existence of direct positive dependence of unproductive outflow of financial capital from growth of the national economic is proved in a sample of Ukraine due to the use of empirical statistical study method. It is identified that the key factor that provokes capital outflow is inappropriate institutional support for strategic investments. The proposed model of estimation of correlation between capital investments and value added allows to calculate the possible economic, social, and budgetary effect from involving into economy of Ukraine investments saved from outflow, that can result in more than 22.6 bln USD of value added growth.

CURRENT STATE AND TRENDS OF THE SHADOW SECTOR OF THE ECONOMY I

Current trends in economic development of most countries highlight the need to improve existing tools for their economic growth and sustainable development. An important aspect in this direction is the implementation of the policy of de-shadowing of the economy. The article analyzes the current world trends in the functioning of the shadow economy, identifies the most common schemes of shadow capital withdrawal and approaches to their classification. The systematization of the existing methodical approaches to the assessment of the level of shadowing of the economy is carried out, their advantages and disadvantages are determined. The expediency of developing a unified approach to estimating the volume of shadow financial flows, which is based on taking into account the multi-channel schemes of shadow capital outflow, is substantiated.