Abstract
In the paper DSGE model is estimated with two independent monetary instruments and limited ability to perform intertemporal optimization of households' consumption. The model is estimated on the Russian data of 2001-2014 for revealing two-dimensional monetary policy shocks: foreign exchange rate shocks and interest rate shocks. The estimation takes into account structural break in parameters of monetary policy rules happened at the end of 2008. Decomposing key macroeconomic variables on structural shocks allows to conclude that Bank of Russia had used its discretionary monetary power to struggle inflation and Ruble devaluation at the expense of recession deepening in the period of world financial crises of 2008-2009. Analyzing transmission mechanisms for two monetary policy instruments the conclusion was made that discretionary foreign exchange market interventions should be used in a situation of stagflation caused by strong negative balance of payments shocks.
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