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Regional effects of inflation targeting in Russia: Factors of heterogeneity and structural inflation rates
https://doi.org/10.32609/0042-8736-2019-9-70-89
Abstract
Inflation targeting in Russia implies maintaining stable low inflation at a level of 4% throughout the country. The presence of structural factors in some regions can determine deviations from the all-Russian inflation, which can lead to different effects of monetary policy in Russian regions. In this paper, we analyze regional heterogeneity of inflation and factors of inflation deviations from the national average, estimate structural levels of inflation in the regions of Russian Federation. These estimates confirm the presence of some regional factors of inflation deviations from the all-Russian indicator, such as the difference in productivity growth of the tradable and non-tradable sectors (Balassa—Samuelson effect), effective exchange rates, real incomes and product stocks. In addition, our results confirm the presence of regions with price growth rate above and below monetary policy target. The results of this research can be used for the development of monetary and communication policies.
Keywords
inflation,
Central Bank of the Russian Federation,
inflation targeting,
regional heterogeneity,
Balassa—Samuelson effect
JEL: E31; E52; E58
Supporting agencies: The content of this article reflects the author’s personal views and may not coincide with the official position of the Bank of Russia. The author is grateful to the staff of Monetary Policy Department and Research and Forecasting Department of the Bank of Russia for valuable comments and suggestions, to the staff of the Bank of Russia branches for their help in collecting, processing and analyzing data, to the anonymous reviewer for valuable comments.
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For citations:
Zhemkov M.I. Regional effects of inflation targeting in Russia: Factors of heterogeneity and structural inflation rates. Voprosy Ekonomiki. 2019;(9):70-89. (In Russ.) https://doi.org/10.32609/0042-8736-2019-9-70-89
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