Eugene Goryunov

Stimulative monetary policy: Myths and reality

In the paper we critically assess the stimulative monetary policy, proposed by the Stolypin Club and other experts. We discuss its inflationary consequences, the ability to accelerate economic growth along with created distortions in credit markets. We argue that the long-term macroeconomic stability cannot be sustained under managed exchange rate. We provide counterarguments to views, according to which inflation in Russia has nonmonetary roots and it is possible to increase money supply without causing inflation due to undermonetization of Russian economy and low utilization of production capacities. Negative consequences of monetary easing are illustrated with recent Belorussian experience.

The Main Areas of Monetary Policy: Price Stability, Resistance to Shocks

The draft Guidelines for the Single State Monetary Policy (hereinafter – the Draft) prepared by the Bank of Russia does not involve significant changes in monetary policy in the upcoming mid-term period. Russian monetary authorities see their main task in maintaining price stability and improving financial sector resilience to possible macroeconomic shocks. The Bank of Russia does not give up the goal of reducing consumer inflation to 4% by the end of 2017, so the regulator plans to maintain a moderately tight monetary policy. There are no plans for active intervention in the foreign exchange market, and the exchange rate will remain floating.

Inflation: Limits of Slowdawn

In Q1 2016, inflation slowed down both month-on-month and year-on-year, driven by further decline in internal demand amid a strengthening rouble, as well as due to the high base effect a year earlier. However, expectations for high inflation are still strong, which will stem decline in price growth rates in the mid-run.

Мониторинг «Стратегий Выхода» Зарубежных Стран Из Режима Антикризисных Мер и Рекомендации Для Российской Федерации (Monitoring the 'Exit Strategy' from a Foreign Country Regime Crisis Measures and Recommendations For the Russian Federation)

This article presents an analysis of papers on various aspects of exit strategies from the crisis measures of economic policy. In the literature, there is currently a clear separation of all the measures into two components related to monetary and fiscal areas. Following this separation, the survey presents two parts. Each part consists of a brief description of the current situation, outline of the problems, description of the main components of an exit strategy, and the discussion and evaluation of proposed government programs.

The Bank of Russia at the Crossroads: Does the Monetary Policy Needs Easing

Recent slowdown of economic growth forces Russian political authorities to seek for policy measures to support economic activity. Monetary expansion is considered as one of the possible alternatives, which we consider inappropriate. During the whole post-crisis period monetary authorities of advances economies in their attempts to boost recovery relied heavily on different sorts of monetary stimulus. Thus it is sometimes argued that Russia should better use such kind of experience and shift to aggressive monetary expansion. This view is mostly wrong since it shows misunderstanding of the goals of the monetary easing policy implemented in advanced economies and also ignores the differences between Russia and advanced countries with respect to macroeconomic conditions. There are two main reasons for extraordinary monetary expansion in advanced economies: sizable cyclical recession and “zero lower bound” problem. Since none of these is present in Russia there’s no reason for implementation of monetary easing policy.