Impact of monetary policy on consumption expenditure and lessons to learn from past crises: New issue of Russian Journal of Money and Finance

Can monetary policy decisions made by central banks impact inequality? There is no unambiguous answer to this question in foreign research. Analysis by Tatiana Ryzhikova and Anastasiya Skuratova (Bank of Russia) based on 2015–2019 data on Russia shows that the Bank of Russia’s monetary policy has an insignificant effect on aggregate consumption inequality. However, a monetary policy easing increases consumption inequality, causing a rise in consumption by median-income households and a reduction in consumption by hand‑to‑mouth households, which can be explained by tighter requirements for borrowers of the latter group.

When the economic situation changes drastically, the rule ‘hope for the best but prepare for the worst’ is becoming especially relevant. In his paper, Danila Karpov (Bank of Russia) demonstrates a method to quickly estimate the maximum possible response of GDP to exogenous changes in imports of intermediate goods. To illustrate his method, the author provides an example of the worst scenario calculation, namely a quick estimate made in spring 2022 to quantify the upper bound of a hypothetical response of Russia’s GDP to the restrictions on imports to Russia enacted by a number of countries.

The history of the Russian financial market includes several episodes of dramatic changes in the ruble exchange rate. One of them is the Russian rouble crisis of mid-December 2014: the exchange rate of the national currency depreciated and then rebounded just in a few days. Anna Obizhaeva (New Economic School) and Gennady Piftankin (Sber) investigate the hypothesis that these events were caused by a large supply-demand imbalance in the foreign exchange market. Their paper is complemented by Valery Smirnov (Bank of Russia) who concludes that the reasons underlying that imbalance were mostly macroeconomic.

The new issue of the Russian Journal of Money and Finance (No. 1, 2023) is available on the website.