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Economies 2016, 4(3), 12; doi:10.3390/economies4030012

Real Effective Exchange Rate of Rouble and Competitiveness of Russian Agrarian Producers

Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences, Prague 165 21, Czech Republic
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Academic Editor: Ralf Fendel
Received: 3 March 2016 / Revised: 30 May 2016 / Accepted: 15 June 2016 / Published: 27 June 2016
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Abstract

A number of development projects were launched in Russia to support agro-producers, emphasizing increasing potential and perspective significance of Agrarian sector in the Russian economy. In light of this, it becomes interesting to investigate the position of agro-producers both in comparison to producers from other domestic sectors and relatively to its main foreign competitors. An analysis of the recent dynamics (from 2000 to 2014) of the real effective exchange rate of Russian rouble serves in the present study as an indicator of price competitiveness, which determines relative position of domestic producers in external markets. The actual competitive state of Russian agro-producers is analyzed by the means of revealed comparative advantage indices proposed by Balassa, Vollrath and Lafay. The calculations have shown that the entire analyzed period can be generally characterized as the period of significant real appreciation of the Russian rouble and the reason behind this is the difference in inflation rates in Russia and its main foreign trade partners. This predetermined the relatively low price competitiveness of agro-producers, which was mostly confirmed by calculated values of Balassa Revealed Comparative Advantage (RCA) index, Vollrath Revealed Competitiveness index (VRC) and Lafay Trade Specialization index (LFI). The short-term real depreciations of the rouble did not have any expected substantially positive impacts on their competitive position. View Full-Text
Keywords: real effective exchange rate; agrarian producers; economic sectors; competitiveness; Balassa index; Vollrath index; Lafay index; Russia real effective exchange rate; agrarian producers; economic sectors; competitiveness; Balassa index; Vollrath index; Lafay index; Russia
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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MDPI and ACS Style

Maitah, M.; Kuzmenko, E.; Smutka, L. Real Effective Exchange Rate of Rouble and Competitiveness of Russian Agrarian Producers. Economies 2016, 4, 12.

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