Discussion by Luigi Biggeri PPP-based Stratification University of Florence, Italy Discussion by Luigi Biggeri of the paper PPP-based Stratification of CIS–EU/OECD Economies Andrey E. Kosarev IARIW / HSE conference “Experiences and Future Challenges in Measuring Income and Wealth in CIS Countries and Eastern Europe” Moscow 17-18 September 2019

Very good paper : Interesting both for the Topic and the Results Obtained Aims Stratification of 54 quite diversified countries (CIS –EU/OECD) to obtain more structurally homogeneous subgroups of countries to better predict the effects on some endogenous indicators of the : economic policy increase of GDPpc on possible systemic effects of the economic policy measures Check the validity of the stratification obtained in terms: Harrod-Balassa-Samuelson effect (correlation between PLI and GDPpc) Engel’s law (effect of the increase of GDPpc on the proportion of income spent for different goods and services)

Strengths of the paper Data set used: very good The ICP produced PPPs and comparable data of GDP and its components in 2005, 2011 and now is in progress the computation for 2017 CIS-STAT computed those data also for 2014 and held negotiations with OECD and Eurostat and achieved an agreement to links CIS and EU/OECD data at BH level to obtain a separate regional comparison of PPPs and GDP for the 54 countries Methods used: adequate to the objectives Partially –multilateral comparison (PMC procedure) to obtain a methodologically harmonized set of PPPs to the US $ Methods for assessing the similarity of economic structure of the countries tendency-homogeneous. Analysis of a cross section scatter plots, and use of linear approximation A special “moving linear segment” procedure (MLS procedure) for identifying “Structural break points”

Results Allow to sub-selecting three tendency homogeneous groups Weaker economies (low-income countries), mid-level economies (medium-income countries) and the most powerful economies (high-income countries) Validity of the stratification obtained in terms of Harrod-Balassa-Samuelson effect and Engel’s law is confirmed (at least in general) Few observations The sub-division in the first two groups seems robust to different indicators used. But this do not happened for the third group of countries The similarity in respect to the regression angles ok, but The results depend on the indicators used and on the change in the key indicator R and R2 are in many cases too small for good prediction of the effects In the figures it is necessary to put the labels to better identify each country

Prospects and future works Useful tool of analysis, to be used for a broader analysis; for practical solutions, it is not necessary to use very detailed categories Replicability of the experiment: CIS will repeats it on the basis of 2017 data that is in production Need to extend the analyses separately for more detailed component of GDP to: take into account the different structure of GDP Considering that the PLI of the sub-components are different from the general PLI for GDP and are different in each country Some sub-components of GDP (such as construction, and machinery) are more important than other to implement the development economic policies The experiment could be extended to other groups of countries that belong to ICP comparison