GDP of Russia (full topic follows) Essay Example | Topics and Well Written Essays - 3250 words

GDP of Russia (full topic follows) - Essay Example The paper will examine the various causes of the change in the GDP during this period. The effect of each cause on the Russian GDP will be examined both individually and collectively. The feasibility of developing a mechanism to test whether the identified factors are indeed critical will be examined in detail. The economic policy of the Russian government with special relevance to property rights, taxation, regulations regarding the entry of private players in various sectors including sectors like energy (which is a crucial aspect of the Russian national infrastructure) is also a crucial to the study of the Russian GDP level over the past decade. The establishment of a macroeconomic structure, the reform agenda of the government and its implementation by the Duma, the oil prices in the international market, the value of the Russian rouble during the period of the study is the other aspects which will have a bearing on the study (Korhonen 1998). We will cover the various sectors contributing to the Russian GDP in the next section, in this section; we will analyze the various types of expenditures which contribute to the GDP. The domestic consumption or the private consumption includes the expenditure incurred by a family on a recurring basis like food, rent, medicinal expenses etc. This is difficult to quantify (McKinsey Global Institute 1999). Next component is Capital investment, the hallmark of capital investment is that money is exchanged for either goods or services; another important hallmark is that after the exchange, there is no liability on the provider of the goods or services for repayment at a later stage (McKinsey Global Institute 1999). After having quantified the domestic and the private sector, it is essential to quantify the expenditure incurred by the government. As a rule it includes the salaries paid to the government servants and the expenses incurred by the government towards the infrastructure establ ishment. An important aspect to be borne in mind while estimating the GDP is that all expenditure which does not translate either into physical goods or services provided is not included into the GDP. This includes savings in banks, mutual funds, investments in stock markets etc (McKinsey Global Institute 1999). The final type of expenditure is the net exports. This is the net difference between the exports and imports of the country (World Bank 2002). The above model attempts to estimate GDP based on the expenditures, we can attempt to quantify the GDP based on the income generated by the economy. In this model, the various parameters of importance are the Gross Operating Surplus (GOS) calculated from the gross profits of the incorporated businesses, the Gross Mixed Income (GMI) which measures the gross profits of the various unincorporated businesses and finally the Compensation of Employees (COE) which measures the total compensation paid to all the workers in both the public and the private sectors. This sector also includes the contributions of the employers to the various social security schemes on behalf of their employees. The total of all these factors is an approximation of the total GDP quantified on the basis of the income model (World Bank 2002). Estimation of various Parameters of the Russian GDP It is important to establish the various param