Economic activity vs generation of local budgets’ revenues: Regional disparities in COVID-19 instability

In the last two years, Ukraine and the world have been living in economic instability caused by the COVID-19 pandemic, which has fundamentally changed the trends in global and domestic economies, public and local finance. This study aims to estimate the trends of economic development of Ukrainian regions in the coronavirus crisis and their impact on the local budgets’ tax revenues generation. Main findings show the impact of the COVID-19 crisis on the development of Ukrainian regions is territorially differentiated. It is determined that in quarantine restrictions, the regions were developing under the impact of behavioral and institutional factors. Although a range of enterprises terminated their activities and there was a decline in income from business activities in 2020, the tax revenues of local budgets increased. The growth of tax revenues was accompanied by decreasing interbudgetary transfers and growing expenditures on containing the spread of pandemics and supporting healthcare. Reduced transfers to local budgets from the public budget affected the funding of investment programs of regional development. The abovementioned effects of falling business activity and consumer expenditures of the population along with falling investment can be considered the delayed effects of economic activity curtailment in the short-term period. An intensive increase of public investment that stipulates projects co-funding from budget funds and resources of businesses and establishment of cooperation between public, regional, and local levels of government should become among the primary steps to overcome the negative trends.

Exchange Rates and Prices: Evidence from the 2015 Swiss Franc Appreciation

We dissect the impact of a large and sudden exchange rate appreciation on Swiss border import prices, retail prices, and consumer expenditures on domestic and imported nondurable goods, following the removal of the EUR/CHF floor in January 2015. Cross-sectional variation in border price changes by currency of invoicing carries over to consumer prices and allocations, impacting retail prices of imports and competing domestic goods, as well as import expenditures. We provide measures of the sensitivity of retail import prices to border prices and the sensitivity of import shares to relative prices, which is higher when using retail prices than border prices. (JEL E21, E31, F14, F31, L11)

МАКРОЕКОНОМІЧНІ АСПЕКТИ УПРАВЛІННЯ СПОЖИВАННЯМ І ЗАОЩАДЖЕННЯМ В НАЦІОНАЛЬНИХ СТРАТЕГІЯХ ГЛОБАЛЬНОГО РОЗВИТКУ

У статті вдосконалено методологічні засади та методичні підходи до визначення джерел економічного зростання країн світу в концепціях техногенного розвитку, сталого розвитку. Розглянуто механізм управління споживанням і заощадженням в сучасних економіках. На основі трактування людини як системоутворюючого ядра сучасного економічного простору в концепції людського розвитку доведено, що важливими об’єктами державного управління розвитком у країнах світу є споживання і заощадження. Єдиним джерелом збереження і примноження основних складових національного багатств, яке є узагальненим показником стратегічного розвитку країн світу, є внутрішні заощадження, доповнені потоком зовнішніх заощаджень. Водночас в сучасних економіках світу, з огляду на гуманістичну спрямованість їх розвитку, особливого значення набуває споживання як мета і джерело розвитку. Встановлено, що головним суб’єктом управління стратегічним розвитком національних економік, відповідальним за забезпечення прогресу і людського розвитку, є уряди країн: саме їх діями визначаються стратегічні і поточні завдання економічного прогресу, вибір макроекономічної і мікроекономічної політики, управління джерелами економічного розвитку і іншу визначальні елементи економічних умов. Обгрунтовано основні за-вдання стратегічного управління споживанням і заощадженнями: управління заощаджувально-інвестиційним потенціалом країни; сприяння ефективному використанню мобілізованих заощаджувально-інвестиційних ресурсів; створення передумов для масового залучення широких верств населення із низькими та середніми доходами до заощаджувально-інвестиційних процесів; забезпечення обсягів і структури кінцевого споживання, сприятливих для економічного зростання; скорочення неофіційного сектору економіки, у якому зосереджені великі потенційні фінансові ресурси розвитку. Таке макроекономічне регулювання має забезпечити оптимальне співвідношення між приватними заощадженнями, котрі складають основу по-повнення інвестиційних ресурсів, і споживчими витратами, що складають основу сукупного попиту і людського розвитку в країнах світової економіки.Ключові слова: споживання, заощадження, управління, глобальний розвиток, національні економіки. The article examines the evolution of approaches to understanding the sources of economic development of countries of the world economy in the concepts of man-made development, sustainable development, and human development. Based on the interpretation of man as the systemic core of the world economic space, the concept of human development has proved that consumption and savings are important objects of development management in the countries of the world. The main objectives of the strategic management of consumption and savings are identified, the implementation of which will ensure the optimal balance between private savings, which form the basis of replenishment of investment resources, and consumer expenditures, which form the basis of aggregate demand and human development in countries integrated into the world economic system. The realization of these objectives forms the basis for so-cio-economic progress at the global level.Key words: сonsumption, savings, managenent, global development, national economies.

To the Problem of Constructing Analytical Indexes of Market Demand: A Variative Approach

The article develops methods for constructing economic (analytical) indexes in the framework of the holistic theory of market demand, built in recent years. By this, the economic indexes presented in the world literature within the framework of the theory of individual demand and, accordingly, related to households, acquire practical value.The introduction provides a brief overview of the main problems of modern indexology and the implementation of an economic approach dating back to the classical work of 1924 by the Soviet statistician A.A. Konüs. The properties of the most well-known «formula» indexes of Laspeyres, Paasche, and Fischer with respect to the fulfillment of the Fisher test criteria are described. These indexes play an important role in the methods proposed by the authors for constructing analytical indexes, which are determined through the function of consumer expenditures. The latter is determined by a utility function that rationalizes trade statistics. The rationalizing utility function is constructed ambiguously, and the corresponding task should be specified. Methods for its solution are proposed, developed within a non-parametric demand analysis of Afriat-Varian. The core of this analysis is the system of linear Afriat’s inequalities that determine the values of the utility function and marginal utility corresponding to statistical demand. This system can be inconsistent and unstable with respect to variations of non-exact demand statistics. In the case of compatibility, inequalities have many solutions, and the choice of different solutions of inequalities gives different values of analytical indexes. The authors suggest three types of tasks for the stable solution of Afriat’s inequalities, which define indexes with characteristics of optimism (low price indexes and high quantity indexes), pessimism (vice versa) and objectivity.Therefore, the problem of increasing the objectivity of consumer demand indexes receives a theoretically justified toolbox methods for calculating analytical market demand indexes that take into account, in contrast to formula indices, consumer preferences.

Food Sources and Expenditures for Seafood in the United States

The aim of this study was to explore United States (U.S.) seafood consumption patterns, food sourcing, expenditures, and geography of consumption. We analyzed seafood intake and food sourcing using the National Health and Nutrition Examination Survey (NHANES) cycles 2007–2008 to 2015–2016 for US adults ≥19 years old (n = 26,743 total respondents; n = 4957 respondents consumed seafood in the past 24 h). Seafood expenditures were extrapolated by combining NHANES with three other public datasets. U.S. adults consumed 63% of seafood (by weight) at home. The top sources of seafood (by weight) were food retail (56%), restaurants (31%), and caught by the respondent or someone they know (5%). Sixty-five percent of consumer expenditures for seafood were at restaurants and other “away from home” sources while 35% were at retail and other “at home” sources. Slightly less than half of overall U.S. food expenditures are “away from home,” which is much lower than for seafood, suggesting that consumers have very different spending habits for seafood than for an aggregate of all foods.

Vote Buying or (Political) Business (Cycles) as Usual?

We report robust evidence of a new short-run monetary election cycle: the monthly growth rate of the money supply (M1) around elections is higher than in other months in a sample of low- and middle-income countries. We hypothesize this is related to systemic vote buying. Consistent with this, we find no cycle in authoritarian countries and countries with strong political institutions and a pronounced cycle in elections where international election monitors reported vote buying or in close elections. Using survey data on daily consumer expenditures, we show that within-household consumption of food increases in the days before elections.

The Impact of Ambient Fine Particulate Matter on Consumer Expenditures

Airborne particulate matter suspended from industrial facilities, power plants, and automobiles is detrimental to health. Growing concerns about the increasing level of airborne particulate matter have led many industrialized nations to advocate for the transformation of the energy market and investment in sustainable energy products. At the other end, consumers have made individual adjustments and attempted to reduce the exposure to the particulate matter. In this paper, we focus on the effect of ambient air pollution on consumer expenditures based on scanner panel data on consumers’ debit and credit card transactions. A series of empirical analyses found robust evidence that the increased level of particulate matter led to considerable disruption in total consumer expenditures with significant heterogeneity across categories. Our findings suggest that consumers alter their spending behaviors in an attempt to reduce the risk of exposures to particulate matter. Such an estimated effect of air pollution is qualitatively different from those of other macroeconomic factors and provides important guidance for policy interventions and practical decisions aimed at sustaining economic growth.