Central Economics and Mathematics Institute

About: Central Economics and Mathematics Institute is a facility organization based out in Moscow, Russia. It is known for research contribution in the topics: Population & Foreign-exchange reserves. The organization has 297 authors who have published 580 publications receiving 6449 citations. The organization is also known as: Federal State Institution of Science Central Economics and Mathematics Institute of the Russian Academy of Sciences.

Out-of-Pocket Health Care Expenditures by Russian Consumers with Different Health Status

Abstract: The paper uses the Russia Longitudinal Monitoring Survey 2003 database to study the types of official and shadow out-of-pocket health care expenditures by consumers with high and low health status. The analysis shows that the inability of less healthy people to pay unofficially for more effective outpatient care results in their higher demand for official inpatient and outpatient treatment. This pattern creates the need to sustain excessive inpatient facilities and slows down health care restructuring. Yet, since the state is incapable of fulfilling its obligations for providing free health care and meet the current demand, in inpatient institutions all consumers, and less healthy ones in particular, spend considerable sums on drugs, even though the latter are guaranteed to be free. Consequently, the current Russian health system itself leads to replacing outpatient with inpatient care, which is more costly both for the patients and for the state.

The use of artificial intelligence’s elements to block the manifestations of individuals’ behavioral activity going beyond the quasi-stable states

Abstract: The monitoring of the metastable states of individuals as a bifurcation point of development of intellectual dynamics of behavioural activity allows us to identify a set of characteristics of coherent-resonant clusters of manifestations of biophysical factors and information-cognitive nature. Conscious changes in the functioning modes of brain and human nervous system can be achieved by electromagnetic influence or purely informational influence as well as by the combined effect of both these factors. The arrangement of complex processes of informational influence is required to penetrate to the level of conscious (semantic) and unconscious (mental, emotional, meditative) interpretation of events when it is necessary to ensure sufficiently stable cognitive-behavioural stereotypes of individuals and their groups. Convergent informational and electromagnetic effects facilitate the effect on the brain, including the use of neuro-linguistic programming for this element with correction or even a complete change of the reflexive matrix (matrix of key reflexive reactions) with a corresponding change and fixation of the personality-style in the personality events to block the release of behavioural activity of individuals beyond quasi-stable states.

Socialism is dead, long live socialism!

Abstract: Utopian socialists believed that socialism is inevitable because it is a more rational system to organize production and life, a system more in line with the “good” nature of human beings. Marxism rejected this reasoning replacing it with what is known as historical materialism: social systems, it argued, emerge, develop and die not because they correspond more or less to the “natural” aspirations of the people, but because they become more or less competitive in the process of historical evolution – a version of social Darwinism applied not to individuals, but to communities and countries. In particular, Marxism stated that capitalism develops productive forces up to the point when they can no longer be managed efficiently in societies with markets and private property; at this point social property of the means of production and centrally planned economy (CPE) become a more efficient way of managing productive forces, whose social nature has outgrown the narrow capitalist limits. This prediction did not come true – in the XX century socialism came to being not in most advanced capitalist countries, but in the periphery and semi-periphery (USSR, Eastern Europe, China, North Korea, Cuba), and only in North Korea and Cuba it survived into the XXI century. This paper explains why capitalism was competitive in recent 500 years, and why an attempt in the XX century to replace it by socialist CPEs did not succeed. But it argues that there are other reasons, not associated with “social nature of productive forces”, which are finally going to make socialism competitive: the costs of numerous negative consequences of high income inequalities, like greater social tensions, high crime and poor institutional capacity of the state, become larger than the benefits of high savings and investment rate that were making capitalism competitive for 500 years. This “new socialism” will not be necessarily mean a total elimination of markets and private property, but is likely to limit both substantially for the sake of achieving lower income inequality.

Bank cost efficiency in Kazakhstan and Russia

Abstract: The Kazakhstan banking system is increasingly viewed as more advanced than the Russian system Kazakhstan adopted the International Accounting System (IAS) in 2003 and the Basel II norms in 2005, while Russia has yet to fully adopt either IAS or Basel II In this paper, bank data for 2002-2006 are used to estimate models of bank cost efficiency In contrast to most previous papers, no significance difference is found for the average cost efficiency scores of banks for the two countries during 2002-2006 How banks are ranked for efficiency depends upon the chosen model (input and output sets) An interesting insight is the finding that most banks in both countries are below optimal size

Reflexivity in Competition-Originated Underwriting Cycles

Abstract: This article addresses the fundamental observation that aggressive newcomers seeking greater market share trigger the industry response of reducing rates that may gradually fall below marginal cost. In this study, the concept of reflexivity as connection between the participants' thinking and the situation in which they participate is applied. This article suggests applying as an insurance regulation technique, while the competition-originated cycle is in its early stage, the triplets of year-end market share, profit, and solvency indicators. It emphasizes the need for applying all these characteristics together, rather than the first two. INTRODUCTION AND RATIONALE In insurance, two major types of cyclic behavior are known: irregular short-range fluctuations and regular up- and downswings, occurring over many years, referred to as underwriting cycles. The former are due to unpredictable fluctuations in economic surroundings; the latter are due to price competition and its consequences. Doing research of the relationship between underwriting cycles and insurance insolvencies, Feldblum (2007) yields the epitome of the competition-originated underwriting cycles: "The apparent ease of entry into the insurance market, the low price elasticity of demand, and the lack of product differentiation among rival insurers encourage aggressive firms to seek greater market shares. The industry response of reducing rates below marginal cost forces insolvencies among weaker carriers and thereby shifts strategic goals from market share gains to profitable operations. Insolvencies are not just a by-product of dismal earnings; they are a driving force behind the cycle." However, unless the industry is monopolistic, no individual firm, no matter how aggressive or influential it may be, can unilaterally call forth the industry response of reducing rates or, put it another way, year after year decline of the market prices. And what in fact is the "market price"? In particular, is it an average price over the industry, or the price of the most optimistic insurer, or an agreement of the participants, or what? The concept of market price is of paramount importance. For instance, it is widely assumed that in the year when the market price is above the marginal cost of producing the product, called year of hard market, insurance operations are profitable. In the year when the market price is below marginal cost, called year of soft market, insurance operations are unprofitable. This difference between hard and soft markets entails numerous consequences. For instance, in years of hard market a large portfolio is an advantage because it yields more profit, while in years of soft market a large portfolio may be a burden producing more loss. On the one hand, while the market is hard, (1) all newcomers must discount prices. Indeed, it is difficult to attract new customers in an established and profitable insurance market, and new insurers believe that they have little to lose by charging lower rates. They have no income now, so any price above marginal cost is additional profit. On the other hand, any firm, not only those aggressive newcomers, may decide to cut prices slightly to gamer a greater market share and increase its profits. (2) How much may prices be cut in such a way? It depends on the propensity to migrate among the insureds (3) and on the behavior of other insurers in the market: having cut prices, one may find that a competing company has cut its prices even more. Behavior of competing companies in this respect becomes paramount. It faces great uncertainty. No one knows exactly the next-year market price, meaning by that the aggregate of the total internal price politics of individual firms on the market. Nevertheless, the general trend is typically known. If an aggressive intruder slashing its prices year after year is followed by more and more firms seeking to garner a greater market share and increase their profits annually, rather than ultimately destroy the prosperous market, the underlying trend becomes persistent and self-reinforcing. …