Monetary Constraints on Economic Growth in Russia

Abstract

Monetary and fiscal policies focused on macroeconomic stabilization, on the one hand, demonstrate formal success, as evidenced by the dynamics of inflation, budget deficit, and public debt. On the other hand, this does not lead to an increase in business activity and economic growth, nor does it enhance the well-being of the population. This article attempts to analyze the reasons for the standard instruments of macroeconomic stabilization used in Russia being unable to intensify the financing of economic growth: for a high level of risks in the economy, distortions in credit selection, and a lack of selective measures in monetary policy. This is an incomplete list but even it is sufficient for drawing conclusions about the need to create a whole range of new institutions and instruments and adjust the old ones, without which Russian macroeconomic policy is unable to cope with the task of ensuring economic growth.