Back to the question of inflation expectations as the subject of analytical and regulatory activity of the Bank of Russia

Abstract

The message is a reaction of its authors to the lengthy article by academician S.Yu. Glaziev published in № 6 of the «Russian economic journal» for 2019 «Once again-on the same rake? (Special opinion of a member of the National financial Council on the draft «Main directions of the unified state monetary policy for 2020 and the period 2021 and 2022» of the Bank of Russia)», which fixes the unacceptably narrow interpretation of the «mega-regulator» of its constitutional duties and areas of application of regulatory tools, and argues for the unacceptability and harmful consequences of the authors of the draft of the subject of their analysis and the scope of Central Bank regulation to the dynamics of inflationary expectations of economic entities and the population. While agreeing in principle with this thesis, the authors of the communication offer their own arguments in its favor. At the same time, special attention is paid to the following two points. First, in Russian socio-economic realities: a) consumers have very little ability to change their spending in response to fluctuations in their inflation expectations; b) sellers (including employees) are extremely limited in imposing their conditions on buyers. Second, the methods for determining specific quantitative values of inflation expectations are far from perfect.