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TERRA ECONOMICUS

The cyclical nature of transformations in economic orthodoxy


TERRA ECONOMICUS, , Vol. 22 (no. 3),

The article identifies the cyclical trends describing the emergence, transformation and decline of orthodoxy in economic theory, depending on the phase of technological and regulatory cycles. This study continues the author’s previous research. Using the historical example of two cycles of world economic dominance, namely, that of British and American ones, the author argues that economic orthodoxy entrenches and blossoms during the periods of advance in transport technologies and free trade regime established by the world economic leader. At the information and communication stage of technological development and corresponding globalist era of world economic development, orthodoxy incorporates the elements of other research frameworks, however, basic preconceptions persist. Through time, the outmoded orthodoxy experiences a terminal crisis. This period matches with the industrial economic development, accompanied by a protectionist world economic regime. At the same time, a set of new economic ideas claiming to be the new orthodoxy emerge and spread in the country representing the new world economic leader. The article describes the terminal stage of the crisis in neoclassical economics that coincides with the end of the cycle of America’s global dominance. As well, the crisis of neoliberal agenda within the neoclassical framework is highlighted, along with the attempts of academic community to transform the neoliberal paradigm into a new program, similar to the liberal Rooseveltian – Keynesian consensus of the mid-twentieth century. The relevance of political economy approaches (in their monetarist version) is brought forward. Besides, this study shows the efforts of some scholars from the Western academic community to propose fundamentally new economic paradigms, such as “quantum economics” and complexity economics.
Citation: Tolkachev S.A. (2024). The cyclical nature of transformations in economic orthodoxy. Terra Economicus 22(3), 6–20 (in Russian). DOI: 10.18522/2073-6606-2024-22-3-6-20
Acknowledgment: The article was prepared based on the results of research supported by the state assignment of the Financial University.

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Ideology and narrative economics


TERRA ECONOMICUS, , Vol. 22 (no. 3),

This article discusses the connection between ideology and economic theories. Adopted from Douglas North, ideologies are understood as shared frameworks of mental models that groups of individuals apply to interpret the environment and to prescript as to how that environment should be ordered. These models serve to explain the supposed and real connection between the means and the results for implementing policies aimed at transforming society. Narrative economics provides a fruitful approach to analyze meaningful theoretical narratives shared by the academicians belonging to various schools of economic thought. The concept of theoretical narrative is widely used in discussions between the mainstream and heterodox economists. In academic discourse, a theoretical narrative might appear as a collective narrative reflecting social interactions between individuals and their groups. Emerging as a result of the competition between individual narratives, collective economic narratives affect the understanding of economic processes and economic policy. The concept of a collective narrative underpins the study of ideology and its role for economic theories. Being associated with the basic elements of economic thinking, theoretical concepts, and cognitive models, ideology influences both real economic decisions and economic policy. A crucial role is played by social groups (namely, the schools of economic thought, political organizations, etc.) in their endeavor to contribute to the connection between the means and outcomes of related policy. A critical assessment of ideologies in terms of their contribution to economic policies and institutional evolution implies identifying which theories and to what extent are exposed to a particular ideology.
Citation: Volchik V. (2024). Ideology and narrative economics. Terra Economicus 22(3), 21–33 (in Russian). DOI: 10.18522/2073-6606-2024-22-3-21-33
Acknowledgment: This work was supported by the grant of Russian Science Foundation № 24-18-00665, https://rscf.ru/en/project/24-18-00665/, “Ideological landscape of Russian economic science”, at Southern Federal University

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The virtual currency market and monetary policy: Financial risk, regulations, and target mandates


TERRA ECONOMICUS, , Vol. 22 (no. 3),

The article deals with the challenges for the virtual currencies market. Our goals are to classify virtual currencies, identify the regulatory issues, and outline a scenario adjustment for central banks to ensure price stability and financial stability through monetary policy. The main point is that, given the dynamics of virtual currencies, the need for their regulation grows, with a special focus on financial risk implied by the inherent characteristics of traditional cryptocurrencies and stablecoins. We analyze specific financial risks related to the circulation of virtual currencies, including: the risk of financing terrorism, illegal activities and money laundering; the risk of tax evasion; the risk of violation of price, financial stability and monetary sovereignty; the risk of reducing the social welfare and consumer protection. Risk regulations are: virtual currency licensing laws; taxation requirements and AML/CTF compliance; capital adequacy requirements and asset requirements, liquidity coverage ratio, and leverage ratio; information disclosure standards for financial organizations that have private digital currencies on their balance sheets; reserve requirements, etc. The authors suggest that central banks’ adjustment in favor of price stability and financial stability are expected to be subject to the Basel III standards and responsive to the specificities of modern financial technologies for digital currencies. The supervisory role of central banks over financial service providers is supposed to rely on the principle that the same financial activity is characterized by the same financial risk and provides for a similar approach to regulation.
Citation: Kochergin D., Andryushin S., Sheshukova E. (2024). The virtual currency market and monetary policy: Financial risk, regulations, and target mandates. Terra Economicus 22(3), 34–57 (in Russian). DOI: 10.18522/2073-6606-2024-22-3-34-57
Acknowledgment: The research was supported by the Russian Science Foundation № 23-28-00398, https://rscf.ru/en/project/23-28-00398/

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Why did Sergei Witte fail, but Stalin had a success? Towards the objective factors driving modernization reforms in Russia


TERRA ECONOMICUS, , Vol. 22 (no. 3),

The article tackles the issue of Russian economic development in the first third of the 20th century. We argue that reforms undertaken by Sergei Witte had much in common with the first five-year plan implemented by the Bolsheviks. These reforms were designed to foster Russia’s transition towards an industrial society through a targeted state policy aimed at reorienting resources from agriculture to heavy industry. The difference between Witte and Stalin was the methods they used to implement economic policy. Unlike most researchers who attribute reform success or failure to ideological factors and politicians’ personal qualities, we prioritize the impact of objective determinants that contributed to Russian economy modernization. Our claim is that Stalin’s reforms success was largely due to the October Revolution, which resulted in restricting the labor force both in rural areas and in light industry, mostly privately owned during the period of new economic policy. We treat the consequences of Witte’s reforms as socially benign and overall favorable for long term economic development, had it not been for the World War I. Limitations on direct taxation are found to be the key mistake of Sergey Witte, and equally, of the whole financial policy of the Russian Empire in the early 1900s.
Citation: Popov G., Safaralieva D. (2024). Why did Sergei Witte fail, but Stalin had a success? Towards the objective factors driving modernization reforms in Russia. Terra Economicus 22(3), 58–74 (in Russian). DOI: 10.18522/2073-6606-2024-22-3-58-74

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Consumer ethnocentrism and the purchase decision of electrical wires and cables


TERRA ECONOMICUS, , Vol. 22 (no. 3),

Consumer ethnocentrism has been an important subject in the field of consumer behavior for several decades, and has serious implications for the implementation of appropriate marketing strategies on the global stage. Consumer ethnocentrism is also a meaningful concept in contemporary business world because of its effects on consumer behavior, the domestic economy, and international trade in goods and services, as many economies are grappling with rising inflation, balance of payment deficits, exchange rate devaluations and dwindling external reserves. Therefore, the purpose of the study is to ascertain the effects of consumer ethnocentric tendency, perceived value and socio-psychological factors on domestic electrical wires and cables purchase decision in Nigeria. Data were drawn from a cross section of 403 owners of residential and office buildings from six cities in Delta and Edo States, Nigeria. Analysis of data generated is based on descriptive and inferential statistics, including ANOVA and regression. The results show that consumer ethnocentric tendency, educational level, income, patriotism, nationalism, individualism, economic development factors and perceived product value exert positive and significant effects on the buying decisions of domestic goods, while the influence of political antecedent is negative. The dominant effect of perceived product value is an indicator of the need for domestic producers to sustain the higher value judgement placed on their goods vis-à-vis imports. The significant impact of consumer ethnocentric tendency on consumers’ buying decision of locally-made electrical wires and cables, underscores the need for domestic manufacturers to implement consumer ethnocentrism into their strategic marketing plans to muster a competitive edge over foreign brands.
Citation: Inoni O.R., Okorie C. (2024). Consumer ethnocentrism and the purchase decision of electrical wires and cables. Terra Economicus 22(3), 75–95. DOI: 10.18522/2073-6606-2024-22-3-75-95

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The impact of digital infrastructure on regional development in Russia


TERRA ECONOMICUS, , Vol. 22 (no. 3),

This study contributes to the empirical literature assessing the relationship between the development of digital infrastructure and economic growth. We estimate the impact of digital infrastructure on economic growth in the regions of Russia based on Robert Solow’s extended model of economic growth. We rely on official statistics on 81 Russian regions provided by Rosstat from 2010 to 2020. Our model supports the hypothesis that broadband Internet access has a positive impact on the regional economy. In particular, estimated gross regional product elasticity by broadband penetration in the corporate sector is 0.38. Estimations are positive and statistically significant. To tackle the endogeneity problem, we use Granger-causality tests which enables us applying panel least squares regression with time fixed effects excluded. Our findings confirm the importance of broadband Internet penetration for regional economic growth, and thereby provide substantiation for related regional policies in the Russian Federation.
Citation: Kramin T.V., Imasheva I.Yu. (2024). The impact of digital infrastructure on regional development in Russia. Terra Economicus 22(3), 115–127 (in Russian). DOI: 10.18522/2073-6606-2024-22-3-115-127

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Models for forecasting the emergence of innovative and digital ecosystems in border regions of Russia


TERRA ECONOMICUS, , Vol. 22 (no. 3),

The article tackles the issues of emerging innovative and digital ecosystems in border regions of the Russian Federation in the context of recent challenges and strategic concerns. In border regions, ecosystems have a beneficial effect on regional the socio-economic development due to unique advantages of cooperation, complementarity and the ability to flexibly respond to geopolitical risks. The ecosystem approach focuses on the balance of interests of parties involved and the rational use of resources. The ecosystem product is a new value jointly created by actors with the support of regional institutions. The research problem is the insufficient study of the factors contributing to the transformation of ecosystems to innovative and digital types. In this regard, this article proposes logistic models to assess the probability of classifying ecosystems as innovative and digital ones, with regard to factors specific for the border economy. The database includes the parameters of 194 most representative ecosystems. Using a logistic regression analysis, we built the forecast models to predict the emergence of innovative and digital ecosystems. The characteristics of ecosystems and specific features related to their border location were used as indicators in the models. The findings show that the probability of innovative ecosystems emergence is positively affected by: industrialization, diversification, cooperation, innovative infrastructure, partnership with a regional university, and export to a border country. The emergence of a digital ecosystem is determined by innovation, diversification and infrastructure. Factors related to the border location do not have a significant impact on digital ecosystem emergence, since most of them are located near less developed neighboring countries.
Citation: Yakimova V.A. (2024). Models for forecasting the emergence of innovative and digital ecosystems in border regions of Russia. Terra Economicus 22(3), 96–114 (in Russian). DOI: 10.18522/2073-6606-2024-22-3-96-114
Acknowledgment: This article was prepared based on the results of research supported by the Russian Science Foundation № 23-28-00044 on the topic «Conceptual model of a regional entrepreneurial ecosystem in a digital environment». https://rscf.ru/en/project/23-28-00044/

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From import substitution to technological sovereignty: Related discourse and a narrative approach perspective


TERRA ECONOMICUS, , Vol. 22 (no. 3),

The issue of ensuring technological development in Russia has intensified in socio-political and academic rhetoric. The emphasis has shifted from the issues of import substitution to ensuring the technological sovereignty. The goal of the paper is to analyze the “technological sovereignty” concept in normative and academic discourse. We conduct the content analysis of normative documents and academic publications, and employ the elements of the narrative approach to analyze the concept of technological sovereignty. Our particular focus is on the institutions and instruments designed to ensure technological sovereignty in the Russian Federation. Research findings show that ensuring technological sovereignty excludes following the autarchic way; the article outlines the perspectives for cooperation and collaboration in science and technology between Russia and friendly countries, in particular BRICS members. We contribute to the existing literature by elaborating on the methodological aspects of narrative studies, as well as through enhancing the understanding of technological sovereignty as a social construct in normative and academic discourse.
Citation: Kapoguzov E.A., Sheresheva M.Y. (2024). From import substitution to technological sovereignty: Related discourse and a narrative analysis perspective. Terra Economicus 22(3), 128–142 (in Russian). DOI: 10.18522/2073-6606-2024-22-3-128-142
Acknowledgment: The research was supported by the Russian Science Foundation, Grant Agreement № 24-28-00711.

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