Finance and Credit

Abstracting and Indexing

Referativny Zhurnal VINITI RAS
LCCN Permalink
Google Scholar

Online available



Cyberleninka (24 month OA embargo)

On the issue of money supply endogeneity in the Russian economy

Vol. 25, Iss. 10, OCTOBER 2019

Received: 23 September 2019

Received in revised form: 7 October 2019

Accepted: 21 October 2019

Available online: 30 October 2019


JEL Classification: E51

Pages: 2266–2280

Malkina M.Yu. National Research Lobachevsky State University of Nizhny Novgorod (UNN), Nizhny Novgorod, Russian Federation

Moiseev I.A. National Research Lobachevsky State University of Nizhny Novgorod (UNN), Nizhny Novgorod, Russian Federation

ORCID id: not available

Subject This article deals with the issues of the endogenous origin of money supply in the modern Russian economy.
Objectives The article aims to substantiate and validate (or disprove) the hypothesis about the endogenous nature of money supply in the Russian economy.
Methods For the study, we used a correlation and regression analysis, the least squares method, Cochrane–Orcutt autoregressive transformation, Granger causality test, and the Engle–Granger approach.
Results The article summarizes theoretical and empirical studies of foreign and Russian authors on the problem of the endogeneity of the money supply. Based on the quarterly data of the Russian economy for 2010–2018, it is revealed that the MIACR rate (Moscow Interbank Actual Credit Rate) and nominal GDP are the cause by Granger for M2, and MIACR rate is the cause by Granger for GDP. The article presents an autoregressive model of money supply dependence on these variables. The model meets all quality criteria. Regression ratios are interpreted as M2 money supply elasticity figures with respect to the factors under study.
Conclusions The conducted research confirms the hypothesis about the endogenous nature of money supply in the Russian economy in the period under review.

Keywords: post-Keynesian economics, monetary policy, correlation and regression analysis, least squares method, autoregressive transformation


  1. Arestis P., Sawyer M.C. (Eds). A Handbook of Alternative Monetary Economics. Cheltenham, UK, Northampton, MA, USA, Edward Elgar Publishing, 2006, 524 p.
  2. Kaldor N. The New Monetarism. Lloyds Bank Review, 1970, July, no. 97, pp. 1–17. URL: Link
  3. Kaldor N. The Scourge of Monetarism. 2nd Edition. Oxford, Oxford University Press, 1986, 136 p.
  4. Moore B.J. Horizontalists and Verticalists: The Macroeconomics of Credit Money. Cambridge, Cambridge University Press, 1988, 440 p.
  5. Pollin R. Two Theories of Money Supply Endogeneity. Some Empirical Evidence. Journal of Post-Keynesian Economics, 1991, vol. 13, no. 3, pp. 366–395. URL: Link
  6. Chick V. The Evolution of the Banking System and the Theory of Monetary Policy. In: Frowen S. (ed.) Monetary Theory and Monetary Policy: New Tracks in the 1990s. Basingstoke. St. Martin's Press, 1993, pp. 79–92. URL: Link
  7. Howells P. The Endogeneity of Money: Empirical Evidence. Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol Working Papers, 2005, no. 0513. URL: Link
  8. Romer D. Keynesian Macroeconomics without the LM Curve. Journal of Economic Perspectives, 2000, vol. 14, no. 2, pp. 149–169. URL: Link
  9. Taylor J.B. Teaching Modern Macroeconomics at the Principles Level. The American Economic Review, 2000, vol. 90, no. 2, pp. 90–94. URL: Link
  10. Woodford M. Interest and Prices: Foundations of a Theory of Monetary Policy. Princeton, Princeton University Press, 2003, 808 p.
  11. Graziani A. The Theory of the Monetary Circuit. Thames Papers in Political Economy, 1989, Spring, TP/PPE/89/1, pp. 1–26. URL: Link
  12. Lavoie M. Note and Comment. The Credit-Led Supply of Deposits and the Demand for Money: Kaldor's Reflux Mechanism as Previously Endorsed by Joan Robinson. Cambridge Journal of Economics, 1999, vol. 23, iss. 1, pp. 103–113. URL: Link
  13. Keen S. Endogenous Money and Effective Demand. Review of Keynesian Economics, 2014, vol. 2, iss. 3, pp. 271–291. URL: Link
  14. Colacchio G., Davanzati G.F. Endogenous Money, Increasing Returns and Economic Growth: Nicholas Kaldor's Contribution. Structural Change and Economic Dynamics, 2017, vol. 41, iss. C, pp. 79–85. URL: Link
  15. Minsky H.P. Stabilizing an Unstable Economy. Yale University Press, 1986, 372 p.
  16. Dow S.C., Ghosh D., Ruziev K. A Stages Approach to Banking Development in Transition Economies. Journal of Post Keynesian Economics, 2008, vol. 31, no. 1, pp. 3–33. URL: Link
  17. Dow S. Monetary Reform, Central Banks, and Digital Currencies. International Journal of Political Economy, 2019, vol. 48, iss. 2, pp. 153–173. URL: Link
  18. Badarudin Z.E., Ariff M., Khalid A.M. Post-Keynesian Money Endogeneity Evidence in G-7 Economies. Journal of International Money and Finance, 2013, vol. 33, pp. 146–162. URL: Link
  19. Nayan S., Kadir N., Abdullah M.S., Ahmad M. Post Keynesian Endogeneity of Money Supply: Panel Evidence. International Conference on Economics and Business Research 2013 (ICEBR 2013). Procedia Economics and Finance, 2013, vol. 7, pp. 48–54. URL: Link00217-7
  20. Güney I.E., Çepni O. Endogeneity of Money Supply: Evidence from Turkey. CBT Research Notes in Economics, 2016, no. 2016-19. URL: Link-
  21. Baharumshah A.Z., Mohd S.H., Masih A.M.M. The Stability of Money Demand in China: Evidence from the ARDL Model. Economic Systems, 2009, vol. 33, iss. 3, pp. 231–244. URL: Link
  22. Malkina M.Yu. Inflyatsiya: teoriya i praktika, istoriya i sovremennost' [Inflation: theory and practice, history and modernity]. Nizhny Novgorod, UNN Publ., 1998, 201 p.
  23. Malkina M.Yu. Inflyatsiya i upravlenie inflyatsionnymi protsessami v rossiiskoi i zarubezhnoi ekonomike [Inflation and the control over inflationary developments in the Russian and world economies]. Nizhny Novgorod, UNN Publ., 2006, 331 p.
  24. Rozmainskii I.V. [Introduction to post-Keynesian]. Idei i idealy = Ideas and Ideals, 2010, vol. 1, no. 1, pp. 88–105.URL: Link (In Russ.)
  25. Skorobogatov A.S. [An endogenous money supply theory: money demand, financial innovation, and business cycle]. Terra Economicus, 2009, vol. 7, no. 1, pp. 43–50. URL: Link (In Russ.)
  26. Rozmainsky I.V. Towards the Theory of Monetary Degradation, or Post Keynesian Analysis of Monetary Problems of the Russian Transitional Economy in 1991–1998. Tеrrа Economicus, 2016, vol. 14, no. 1, pp. 48–60. URL: Link
  27. Vymyatnina Yu. How Much Control Does Bank of Russia Have Over Money Supply? Research in International Business and Finance, 2006, vol. 20, iss. 2, pp. 131–144. URL: Link
  28. Trunin P.V., Vashchelyuk N.V. [The Analysis of Money Supply Endogeneity in Russia]. Zhurnal Novoi ekonomicheskoi assotsiatsii = Journal of the New Economic Association, 2015, no. 1, pp. 103–131. URL: Link (In Russ.)
  29. Vashchelyuk N.V. [Analyzing the role of the RF Central Bank in forming money supply in 2009–2015]. Finansovaya analitika: problemy i resheniya = Financial Analytics: Science and Experience, 2015, no. 43, pp. 44–59. URL: Link (In Russ.)
  30. Bozhechkova A.V. et al. Postroenie modelei denezhnogo i valyutnogo rynkov [Building monetary and currency markets models]. Moscow, Gaidar Institute Publ., 2018, 96 p.

View all articles of issue


ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

Journal current issue

Vol. 26, Iss. 5
May 2020