To the adequacy of the financial system to the modern economy of Russia

Abstract

Subject. The article examines the adequacy of the financial system to the Russian economy as is. Objectives. I evaluate whether the financial system meets requirements of the modern economy of Russia, and model the scope of compliance. Methods. The study relies upon the statistical analysis and mathematical modeling of developments in the correlation of cash flows and economic activities. Results. The focuses on the adequacy of the financial system to requirements of the modern economy of Russia. I analyze the structure, form and content of the economic system during the generation and utilization of cash flows. The financial system is deemed inadequate if there are some controversies between cash flows and economic activities, which can be eliminated with specific financial and economic remedies that are typical of the Russian economy. Financial remedies include an increment in gold reserves and money supply. Economic ones require to increase the production of crude oil, natural gas, associated gas, extraction and enrichment of iron ore. Modeling the dynamics of the financial and economic systems and applying the Cobb–Douglas production function, I marked the compliance boundary of the financial system from perspectives of the modern economic system. Conclusions and Relevance. Seeing the current situation in Russia, we can guess the financial system is adequate to the economic situation. I should also point out a variety of opportunities to preserve the structure, form and content of the economy, using financing mechanisms within the adequacy requirements. The findings enrich relevant knowledge and create new competencies of governmental authorities for making effective managerial decisions to ensure the sustainability of the Russian economy in accordance with the financial policy.