Russia Fall China Rise: Simulation Results of SAM Models for Transiting Economies

Abstract

The paper reports on multiplier analysis of comparable Social Accounting Matrices for Russia and China. The benchmark is around 1990, which constitutes a crucial year in the transition of the two countries to mixed market-state economies. The relative sizes of the two economies have reversed position in historically unmatched terms during less than two decades. Growth multipliers in China are found to be higher than in Russia, reflecting more intensive and relatively equally spread circular flow interactions. Income multipliers are found to be less regressive in China than in Russia, which reflect stronger trickle-down effects and weaker leakage-up effects in the income and expenditure patterns of rich and poor household groups in China as compared to Russia. The paper is adapted from chapter 9 in Cohen (2013).