1-SOCIAL AND ECONOMIC PROBLEMS IN TRANSITION ECONOMIES: THE CASE OF THE RUSSIAN FEDERATION

SOCIAL AND ECONOMIC PROBLEMS IN TRANSITION ECONOMIES: THE CASE OF THE RUSSIAN FEDERAT

Abstract

The defeat of the Soviet Union's arms race with the Western Bloc led to the beginning of a troubled period in the economy. In the early 1990s, as a result of the dissolution of the Soviet Union, Transition Countries abandoned their centrally planned economic structure and adopted the market economy. The fact that economic and social problems occurred at different times during the transition period caused the Eastern Bloc countries to experience the processes in different years. The Russian Federation, which is one of the transition countries and has just gained its independence, has also adopted the new order, such as the economic and social reforms experienced during the transition period. It is seen that transition economies and social and economic problems of the Russian Federation and the ARDL analysis of the Russian Federation have not been comprehensively examined in the literature.

Therefore, in this study, factors affecting economic growth in the Russian Federation were examined. The main hypothesis of the study is that the variables that increase income in the Russian Federation are net foreign trade, public expenditures, unemployment and industrial production. For this reason, the relationship between foreign trade surplus, public expenditures and industrial production with GDP was analysed using the ARDL model and 1995-2020 data. It has been observed that the contribution of public expenditures to the economy of the Russian Federation is great. A high unemployment rate has a negative effect on income. It was determined that industrial production did not have a significant effect on GDP.