Monetary Policy Rules for Russia

Esanov, Akram; Merkl, Christian; Vinhas de Souza, Lucio Vinhas

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Monetary Policy Rules for Russia

Journal of Comparative Economics, Vol. 33, No. 3, pp. 484-499, September 2005

Posted: 3 Feb 2006

See all articles by Akram Esanov

Christian Merkl

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg; IZA Institute of Labor Economics

Lucio Vinhas Vinhas de Souza

DG-ECFIN, European Commission; UNU-CRIS

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Abstract

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, F41

Suggested Citation: Suggested Citation

Esanov, Akram and Merkl, Christian and Vinhas de Souza, Lucio Vinhas, Monetary Policy Rules for Russia. Journal of Comparative Economics, Vol. 33, No. 3, pp. 484-499, September 2005, Available at SSRN: https://ssrn.com/abstract=881014