DOI: 10.32609/j.ruje.11.144107

Authors: Maria S. Lymar, Henry I. Penikas

Abstract: The objective of the current work is to estimate to what extent support measures of the Bank of Russia and the Government of the Russian Federation promoted financial stability of banks and the financial market overall so to sustain lending economy-wide during the crisis periods of 2014, 2020, and 2022. These measures mutually assured the financial stability of the institutions and enabled them to extend lending within the economy for RUB 8 trillion in 2022 (~$100 billion, or 8%+ of the total loan book), of which Bank of Russia measures contributed to RUB 4.3 trillion of the total, the Government of Russia — to RUB 2.0 trillion, while the synergy was RUB 1.7 trillion.

HTML

XML

PDF

DOI: 10.32609/j.ruje.9.111967

Authors: Eugene L. Goryunov, Sergey M. Drobyshevsky, Alexey L. Kudrin, Pavel V. Trunin

Abstract: The paper examines the factors of global inflation acceleration in 2021–2022. We consider primarily the developed economies, where rates of inflation over the last two years have exceeded multi-year highs and have significantly exceeded target levels. We find that the cause of accelerating inflation was an imbalance between aggregate demand, which started to increase rapidly in the second half of 2020 as economies began to adapt to the circumstances of the pandemic, and aggregate supply, which encountered persistent constraints associated with interruptions in global supply chains. Significant support for demand was provided by fiscal stimulus that was unprecedented in scale and was accompanied by policy interest rates reaching extremely low levels, and by active injections of liquidity by central banks. The willingness of governments to implement ultra-expansionary monetary and fiscal policies can to a considerable degree be attributed to the fact that during the previous decade large budget deficits, zero interest rates, and programs of quantitative easing had not resulted in macroeconomic destabilization. We examine the view of many central banks that the inflationary wave would not be long-lasting, which was a crucial reason for delaying the interest rates increase. We consider the conditions in which the leading economies might fall into the stagflation trap.

HTML

XML

PDF

DOI: 10.32609/j.ruje.8.89717

Authors: Shweta Sikhwal

Abstract: We examine, using a monthly dataset from 2007 to 2020, the US interest rate shocks’ effects on exchange rates, broad money aggregates, and foreign exchange reserves in emerging market economies (EMEs) post global financial crisis. To evaluate the impact of unconventional monetary policy initiatives, we employ Wu-Xia’s shadow interest rates. There are two parts to the methodology. The first part focuses on the identification of the unanticipated US interest rate shock in a SVAR model. In the second part, we incorporate the US interest rate shock into the panel structural VAR to analyze its impact on 29 countries from various regions. A positive shock to US interest rates depreciates the exchange rate of EMEs against the US dollar. According to our findings, it results in a decline in the broad money aggregate and foreign exchange reserves. The findings are consistent across multiple EME regions.

HTML

XML

PDF