About the Russia KLEMS Group
The group was formed in July 2019 at the Laboratory for Research in Inflation and Growth of the Expert Institute at HSE University (Moscow). The group performs empirical research on long-term economic growth and productivity. It also researches structural change and cross-sectoral linkages, cross-country comparisons of income and wealth, the micro-foundations of productivity growth, the problems of productivity measurement, and historical statistics.
The major objective of the group is to update and extend the Russia KLEMS database, which has been supported by HSE University since 2007 as a participant of the World KLEMS initiative.
What is KLEMS?
KLEMS is an acronym for the factors of production: capital (K), labor (L), energy (E), materials (M) and services (S). The KLEMS approach represents the rate of economic growth of the gross output of the whole economy as the sum of inputs of factors of production by sector. The approach is based on the neoclassical model of growth in industries, first proposed by Jorgenson et al., and is harmonized with the system of national accounts (SNA). The construction of such a system of indicators in a single industrial classification based on common principles for different countries makes it possible to analyze the sources of economic growth not at the level of the economy as a whole, but at the level of individual industries, comparing, for example, the sources of growth and productivity of ‘Manufacture of machinery and equipment”, for example, in Russia and in Germany.
Compared to cross-country comparisons at the level of the economy as a whole, the sectoral level provides more detailed and realistic data for analysis, since growth in agriculture, extractive industries, manufacturing and financial services can vary significantly. The economy as a whole can grow not only because of productivity growth within industries, but also because of inter-industry flows. According to recent studies, such a growth-enhancing reallocation, is the hallmark of many successful growing economies.
The development of such a scorecard is being led by research groups and statistical institutes around the world as part of the World KLEMS initiative. It started in 2010 and brings together large transnational projects EU KLEMS, Asia KLEMS, LA KLEMS, as well as projects in individual countries.
The World KLEMS initiative provides research infrastructure to analyze the sources of economic growth for more than 40 countries, including all OECD economies and the leading economies of the Asia-Pacific region and Latin America. World KLEMS data has become the basis for dozens of publications in leading international journals.
The Russia KLEMS project
Until recently, a key obstacle to researching the Russian economy using cross-country comparisons at the industry level was the lack of data. A detailed system of industry indicators for a relatively long period, harmonized with similar data for other countries, was not available to researchers. The Russia KLEMS project fills this gap.
Development of Russia KLEMS dataset began at the HSE in 2007 in collaboration with colleagues from the World KLEMS initiative and, in particular, the Groningen Growth and Development Centre the University of Groningen. To date, three Russia KLEMS data releases have been published—2013, 2017 and 2019.
The Russia KLEMS data set is globally recognized and the only source of consistent time series for the output and the factors of production of the Russian economy since 1995 in 34 types of activities of OKVED, the Russian classification of economic activities, harmonized with NACE 1. The last release of the data set covers the period from 1995 to 2016. All releases are presented on our website.
In 2019, a separate working group was formed in HSE to further support and develop the Russia KLEMS data set. The group is forming, supporting and developing a system of indicators of output, factors of production and productivity for the Russian economy, suitable for analyzing the sources of long-term economic growth and making cross-country comparisons.
The tasks include:
- the creation and annual updates of the system of indicators of the factors of production for the Russian economy at the level of at least 34 types of activities;
- the preparation and annual updates of the methodological description of Russia KLEMS;
- improving the methodology for constructing the Russia KLEMS indicators and expanding the data used, taking into account the current state of the system of national accounts (SNA), supply and use tables (SUT).
- interaction with the Federal State Statistics Service (Rosstat) to obtain official data, improve the Russia KLEMS methodology and the official methodology for constructing indicators of SNA, IOT and productivity;
- the adaptation of the Russia KLEMS methodology to changes in Russian statistics;
- support for users of the Russia KLEMS system;
- interaction with the expert and analytical community to disseminate information about the Russia KLEMS scorecard, including the provision of information and training seminars;
- interaction with international partners of the World KLEMS, EU KLEMS, LA KLEMS and Asia KLEMS initiatives to increase the cross-country comparability of Russia KLEMS;
- supervising student research and the adaptation of the state-of-the art methods of international comparisons of productivity, including the KLEMS approach, to education.
Other research interests of the Russia KLEMS group
The analysis of the sources of long-term growth for the Russian economy in a cross-country context, carried out by the Russia KLEMS group, is not limited to the last two decades. The group collects historical statistics on the dynamics of output and factors of production in the post-war period. This is being carried out as a part of the project “Long-term economic growth and structural changes in the the USSR and the CIS since 1960”.
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