Heterogeneity of the impact of the ruble exchange rate on output in the regional context

Babakin K.

This research examines the regional heterogeneity of the impact of the ruble exchange rate dynamics on output. The empirical assessment of the relationship between the exchange rate and the output of Russian regions has been carried out using models of structural vector autoregression based on data from January 2010 to December 2019 in the context of two periods: prior to the Bank of Russia’s introduction of the free-floating regime of the ruble and thereafter. The research shows the regional heterogeneity of the impact of the exchange rate on the output, notes the possibility of both preserving and changing the nature of the said impact, depending on the general economic conditions. The academic novelty of this research is that the assessment of the impact of the exchange rate on output has been carried out for the regions of the Russian Federation, unlike most research, where the authors examine the impact of the exchange rate for the country as a whole. The got results will allow a better assessment of the impact of currency shocks on the economy and whether it should be taken into account in the monetary policy decisions.

Heterogeneity of the impact of the ruble exchange rate on output in the regional context