Finance and Credit

Short-term results of the abrupt transition to inflation-targeting policies in the Russian Federation

Vol. 23, Iss. 34, SEPTEMBER 2017

PDF  Article PDF Version

Received: 21 July 2017

Received in revised form: 7 August 2017

Accepted: 21 August 2017

Available online: 19 September 2017


JEL Classification: С23, E52, E58, O42

Pages: 2032–2043

Butuzova A.S. Lomonosov Moscow State University, Moscow, Russian Federation

Importance The problem of prudent monetary policy is crucial nowadays. One of the mitigating and prudential methods of regulating monetary policy adjustment is inflation targeting. In the transition to a floating exchange rate and an inflation-targeting regime in Russia, this subject is particularly important.
Objectives I concentrate on the comprehensive analysis of initial conditions before the transition to inflation-targeting regime and building economic models after the transition.
Methods In studying the peculiarities of transition to inflation targeting, I used economic modeling, synthesis method, and a retrospective analysis. The economic interpretation was carried out on the basis of classical economic models.
Results Short-term results have been revealed and the medium-term results of transition to inflation targeting in Russia are modeled.
Conclusions and Relevance I conclude that negative short-term results of the transition to inflation targeting are determined by the untimely transition. Significant specificity of the Russian economy in comparison with other countries requires a prudential approach. Macroeconomic and geopolitical conditions should be taken into account.

Keywords: macroeconomics, monetary policy, exchange rate, inflation targeting, currency policy


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