On the distribution of monetary policy tools by targets of development

Publication type Article
Status Published
Occupation: Senior Research Fellow of the Institute of Economics RAS
Institute of Economics RAS
Lomonosov Moscow State University
Address: Russian Federation, Moscow
Occupation: Doctoral student at the Department of Theory and Methodology of State and Municipal Administration, Faculty of Public Administration
Affiliation: Lomonosov Moscow State University
Address: Russian Federation, Moscow
Journal nameObshchestvo i ekonomika
EditionIssue 6

Monetary policy is the main means for stimulating economic growth and achieving other goals of economic development. The objective of the study is to develop the “goals-instruments” principle in relation to monetary policy in order to show the possibility of distributing influence and, for this reason, selecting monetary policy instruments that have different effects on changing development goals, the latter considered to be changes in gross domestic product, inflation and unemployment. The research methodology is represented by Tinbergen's theory of economic policy, structural analysis, and monetary theory. The use of these approaches makes it possible to construct a set of econometric equations that reflect the impact on GDP and its growth, inflation and unemployment; it also allows to conduct an empirical analysis of the relationship between inflation and growth and the dynamics of the M2 money supply components for the Russian economy. The overall result of the study is a picture of the distribution of monetary policy instruments by economic development goals for the Russian economy. It is substantiated that the policy of raising the interest rate was not a strong reason for reducing inflation, but hindered economic growth, creating a potential basis for future inflation. The monetary policy pursued in Russia did not take into account the structure of the money supply and its impact on inflation and growth.

Keywords«targets-instruments» principle, gross domestic product, inflation, unemployment, monetary policy, multiple regressions, money supply structure, monetary policy instruments
Publication date24.06.2022
Number of characters29843
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