Abstract
In the process of Russian economic development, the oil industry is one of the important pillar industries. More than 50% of the total revenue of the Russian government comes from the oil and gas industry. Oil and oil products exports account for about 56.9% of Russia’s total export[1]. So Russia’s economy is inextricably linked to oil prices. Rosneft’s role in budgetary revenue sources is growing. In the development of the world economy, the change of international oil price affects the development of the Russian economy. This paper reviews the relevant theories about the relationship between oil price and Russia’s economic growth. Besides, the short-term and long-term effects of oil price fluctuation on Russian economy are analyzed with Keynes’s income determination theory and “resource Curse” theory[2] respectively. In addition, the granger causality test is used to analyze the relationship between the fluctuation of oil price and the change of Russian GDP. The following conclusions are drawn from the analysis. Firstly, oil price rise is beneficial to Russian economic growth in the short term, but will hinder Russia’s economic long-term development. Secondly, the fluctuation of oil price is the granger cause of the change of Russian GDP. However, the change of Russian GDP is not the granger cause of the fluctuation of oil price.
Highlights
From September 2017 to March 2018, the European Union imposed economic sanctions on Russia, coupled with the "cold winter" of oil price, and Russian economy declined rapidly
Based on Keynes theory, this paper makes a quantitative analysis of the impact of oil price fluctuation on Russian economy, and makes a quantitative analysis of oil price on Russian economy according to Granger causality test
It can be seen from the test results that at 90% confidence level, the change of Russian GDP is not the granger cause of the change of oil price, while the change of oil price is the granger cause of the change of Russian GDP
Summary
From September 2017 to March 2018, the European Union imposed economic sanctions on Russia, coupled with the "cold winter" of oil price, and Russian economy declined rapidly. This is mainly because Russia's national economic growth mainly depends on energy. It is of great significance to analyze the impact of Russian oil price fluctuations on economic development through empirical analysis. This paper will discuss the impact of oil price fluctuation on Russian economy and analyze the impact of international oil price on Russian Federation's finance, GDP, trade balance and import and export. Based on Keynes theory, this paper makes a quantitative analysis of the impact of oil price fluctuation on Russian economy, and makes a quantitative analysis of oil price on Russian economy according to Granger causality test
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