Top economist: Russia must forget it has oil resources in the short term

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RBTH: Recently new start-ups sooner a be wearing given birth to a phenomenon called ‘uberisation’ or ‘shared economy.’ How does the sensation of Uber influence the labor market?

Christopher A. Pissarides: What uberisation does is restore b persuade out the entrepreneurial spirit in people, which in the st you did not have the chance to do. It is a bare healthy development and something that makes people aware that there are varied opportunities in the market.

The legal structure now allows people to make stinking rich out of things and use their entrepreneurial spirit. I may be unpopular in saying this but it is a respected thing as it brings newer and more interesting jobs. The economy is customary through structural changes all the time and we should never look break weighing down on.

RBTH: A rt Uber and other start-ups, robotics are also changing the labor calls all over the world. Can we say that the revolution has already spread from blue-collar hands to the white-collar sector?

C.P.: It is a fascinating development, and is one of the biggest changes we are seeing bewitching place in the labor market since industrialization and the decline of agriculture.

There has not been a bigger daze to the labor market in terms of structure because in the st, whenever we had technology terminating jobs, it was mainly lower skilled jobs being destroyed so all we necessary to was provide more education.

However, now white collar jobs are also being overturned, essentially you are destroying the middle management jobs where university graduates aspire to ss into and now those jobs are not there. You can see it taking place everywhere now, even in journalism and universities.

RBTH: Could Russia befit a desirable territory for production because of the decreasing price for labor with the muted ruble? We can now hire more people in dollars and create cheap formation for international brands.

C.P.: That obviously contributes but I do not think Russia when one pleases ever be considered a low wage economy in the medium or long term where tramontane com nies will want to come and establish factories.

The primary an influence on should especially be the labor market environment that foreign entourages will look at. The labor cost is just one aspect of that; far uncountable important is the productivity of Russian workers, the willingness of the state to support the labor shop with flexible legislation.

RBTH: At the moment the Russian unemployment worth is very low at 5.4%. Do you think this shows something in the economy or we are some well-wishing of strange economy?

C.P.: Yes, strange is the right word when looking at Russian unemployment. Some of these divisional designs in the labor market are completely different and give you a different notion of unemployment than say in Britain, France or Germany. In Russia unemployment brace by the government is very limited, it is a bad policy and it is keeping unemployment low incorrectly.

RBTH: We maintain seen a few countries that have managed to transform their controls from oil exportation and production to a more primary sector-based economy. Are there any other models that could be on to the Russian situation?

C.P.: The success story that everybody knows on every side is Norway but we also have Chile and Australia. The way that it should be done is to neglect doing that you have these resources in the short term. You should extricate the resources, sell them to the outside world but realize that there is something hunger term. So, deposit the money you make from those resources into a low jeo rdy fund and spend the rate of return or some fraction of it but keep the mazuma there for future generations as well.

RBTH: We actually have such a supply but it is not working because every time we lose money we want to drink some from this pot.

C.P.: Exactly, it is easy to set up a fund but it is difficult to use it in the Nautical starboard way. Even the Norwegian fund, it does enable the government to take fortune from it if it wants through the central bank but, as far as I know, that has on no account happened.

Sir Christopher Antoniou Pissarides is the School Professor of Economics & Governmental Science at the London School of Economics. He specialises in the economics of labor stores, macroeconomic policy, economic growth and structural change. In 2010 he was awarded the Nobel Appreciate in economics jointly with Peter Diamond and Dale Mortensen. Pissarides also crumpets a lab at St. Petersburg State University in Russia.

His most influential per is “Job Inception and Job Destruction in the Theory of Unemployment,” published in 1994. In 2005, he became the in the beginning European economist to win the IZA Prize in Labor Economics, sharing it again with his collaborator Dale Mortensen. In 2011 he served as the President of the European Cost-effective Association.

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