Monetary Policy Rules for Russia
Kansas State University
Kiel Institute for the World Economy; University of Kiel; Institute for the Study of Labor (IZA)
Lucio Vinhas Vinhas de Souza
DG-ECFIN, European Commission; UNU-CRIS
Journal of Comparative Economics, Vol. 33, No. 3, pp. 484-499, September 2005
The paper reviews the recent conduct of monetary policy and the central bank's rule-based behavior in Russia. Using different policy rules, we test whether the Bank of Russia reacts to changes in inflation, the output gap and the exchange rate in a consistent and predictable manner. Our results indicate that, during the period from 1993 to 2004, the Bank of Russia used monetary aggregates as the main policy instrument. Some estimations provide evidence that the Bank of Russia was more concerned with reducing inflation before 1995, while the priorities shifted towards exchange rate stabilization after 1995.
Keywords: Monetary policy rules, exchange rate, Central bank
JEL Classification: E52, E61, F33, F41Accepted Paper Series
Date posted: February 3, 2006
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