Subject The article studies whether the inflation targeting policy of the Central Bank of Russia can coexist with the macroeconomic intention of spurring the GDP growth. Methods The research is mainly based on tools of mathematical, formal and dialectic logic, analysis and synthesis, induction and deduction. Results We conducted the vector regression analysis to evaluate the correlation of GDP and monetary tools with 2014–2016. Key tools of inflation targeting have a limited impact on the economic growth level. We considered how measures of the Central Bank of Russia in 2014–2016 influenced the efficiency of the budgetary policy. To evaluate what effect inflation targeting had on the economic growth in 2017–2018, we applied the equation of fiscal restrictions imposed by the government. This type of monetary policy was found to considerably stabilize macroeconomic conditions in Russia for the said period. The economy and fiscal deficit may be much better improved if the difference between inflation (not exceeding the target) and key rate is as little as possible provided the economic growth is highly sensitive to inflation and key rate. Conclusions The research determined limits and prospects for applicability of inflation targeting to stimulate business activities in Russia in the short- and mid-run. The findings can be used to formulate provisions on the regulation of monetary policy for spurring the economic growth.
Slepov V.A., Burlachkov V.K., Danko T.P. et al. Model for Integrating Monetary and Fiscal Policies to Stimulate Economic Growth and Sustainable Debt Dynamics. European Research Studies Journal, 2017, vol. 20, iss. 4A, pp. 457–470. URL: Link#
Pestova A.A. [On the effects of monetary policy in Russia: The role of the space of spanned shocks and the policy regime shifts]. Voprosy Ekonomiki, 2018, no. 2, pp. 33–55. (In Russ.)
Burlachkov V.K. Makroekonomika, monetarnaya politika, global'nyi krizis: analiz sovremennoi teorii i problemy postroeniya novoi modeli ekonomicheskogo razvitiya [Macroeconomics, monetary policy, global crisis: Analysis of the modern theory and problems of building a new model of economic development]. Moscow, Librokom Publ., 2013, 240 p.
Coibion O., Gorodnichenko Y., Kumar S., Pedemonte M. Inflation Expectations as a Policy Tool? NBER Working Paper, 2018, no. 24788. URL: Link
Kartaev F.S., Yakimova Yu.I. [The influence of inflation targeting on the pass-through effect of the exchange rate]. Voprosy Ekonomiki, 2018, no. 11, pp. 70–84. (In Russ.)
Slepov V.A., Burlachkov V.K., Gryadovaya O.V. [The role of the interest rate policy of the Bank of Russia in the formation of the federal budget]. Finansovaya ekonomika = Financial Economy, 2017, no. 2, pp. 7–13. (In Russ.)
Andrade P., Galí J., Le Bihan H., Matheron J. The Optimal Inflation Target and the Natural Rate of Interest. NBER Working Paper, 2018, no. 24328. URL: Link
Orlova L.N., Kuznetsov V.V. [Of the issue of sustainable development of economic systems]. Vestnik Rossiiskogo ekonomicheskogo universiteta imeni G.V. Plekhanova = Vestnik of Plekhanov Russian University of Economics, 2018, no. 6, pp. 16–23. (In Russ.)
DeLong, B.J., Summers L.H. Fiscal Policy in a Depressed Economy. Brookings Papers on Economic Activity, 2012, vol. 44 (1), pp. 233–297. URL: Link
Volkov I.I. [Portfolio Matrix Approach to assessing the effectiveness of Russiaʼs fiscal policy]. Vestnik Rossiiskogo ekonomicheskogo universiteta imeni G.V. Plekhanova = Vestnik of the Plekhanov Russian University of Economics, 2018, no. 5, pp. 37–46. (In Russ.)
Bessonova E.V. [Analysis of the dynamics of the aggregate factors' productivity at Russian enterprises (2009–2015)]. Voprosy Ekonomiki, 2018, no. 7, pp. 96–118. (In Russ.)
Auerbach A., Gorodnichenko Yu. Measuring the Output Responses to Fiscal Policy. NBER Working Paper, 2010, no. 16311. URL: Link
Auerbach A., Gorodnichenko Yu. Fiscal Multipliers in Recession and Expansion. NBER Working Paper, 2011, no. 17447. URL: Link
Kilponen J., Pisani M., Schmidt S. et al. Comparing Fiscal Multipliers Across Models and Countries in Europe. ECB Working Paper Series, 2015, no. 1760. URL: Link
Chari V.V., Kehoe P.J., McGrattan E.R. Business Cycle Accounting. Econometrica, 2007, vol. 75, iss. 3, pp. 781–836.
Cochrane J. Fiscal Theory, and Fiscal and Monetary Policy in the Financial Crisis. Paper for the Conference on “Monetary-Fiscal Policy Interactions, Expectations, and Dynamics in the Current Economic Crisis” at Princeton, May 22–23, 2009. URL: Link
Benigno P., Woodford M. Inflation Stabilization and Welfare: The Case of a Distorted Steady State. Journal of the European Economic Association, 2005, vol. 3, no. 6, pp. 1185–1236.
Davig T., Leeper E.M. Monetary-Fiscal Policy Interactions and Fiscal Stimulus. European Economic Review, 2011, vol. 55, iss. 2, pp. 211–227.