Money Supply and Monetary Policy in Russia: A Post-keynesian Approach Revisited

Abstract

In our paper, using Granger causality tests on data covering 1995-2011 we find that credit is an important source of money supply endogeneity in Russia, with the two distinct sources of money supply endogeneity present: the one in the sense of accommodationist approach (through state-controlled firms) and another in the sense of structuralist approach (through private sector firms), with external credit operations being an important part of it. Inflation is found to be consistently the cause, not the result of changes in the money supply. Our findings support some recommendations for the Bank of Russia and its monetary policy.

Keywords: post-Keynesian economics, endogenous money supply, inflation, Russia

JEL Classification: E51, E52, E61