Economic Analysis: Theory and Practice

Economic growth, inflation, investments and incomes in the Russian Federation: Econometric model-based analysis and forecast

Vol. 17, Iss. 1, JANUARY 2018

Received: 2 June 2017

Received in revised form: 19 October 2017

Accepted: 15 November 2017

Available online: 29 January 2018


JEL Classification: E51, E52, E62, O42, O47

Pages: 18–29

Mitsek S.A. Liberal Arts University, Yekaterinburg, Russian Federation

ORCID id: not available

Mitsek E.B. Liberal Arts University, Yekaterinburg, Russian Federation

ORCID id: not available

Importance The article describes findings based on the new version of our econometric model, designed to analyze current trends in the Russian economy and determinants of its development, and to forecast its behavior pattern for the coming years.
Objectives Our purpose is to show the influence of various factors on the main macroeconomic variables under different scenarios of external economic situation and options of monetary and fiscal policy in the Russian Federation.
Methods Using the econometric model, we analyzed current trends in economic development and revealed factors impacting the macroeconomic indicators and economic growth of Russia's economy.
Results The model shows that if the present trend in exogenous variables continues, the economic growth in Russia in 2018–2019 will become negative. However, loosening the monetary policy and curbing the growth of public procurement deflator will be favorable for investments in fixed assets and the economic growth.
Conclusions The model demonstrates a relative weakening of external economic factors' influence on the Russian economy. It remains strongly dependent on demographic factors. Major problems of the Russian economy include stagnation of total factor productivity and insufficient level of investment in fixed assets.

Keywords: econometric model, economic growth, investment, inflation, fiscal policy


  1. Greene W.H. Econometric Analysis. Upper Saddle River, NJ, Prentice Hall, 2008.
  2. Johnston J., DiNardo J. Econometric Methods. McGraw Hill Higher Education, 4th ed., 1997.
  3. Pindyck R.S., Rubinfeld D.L. Econometric Models and Economic Forecasts. McGraw-Hill/Irwin, 4th ed., 1997.
  4. Intriligator M.D., Bodkin R.G., Cheng Hsiao. Econometric Models, Techniques, and Applications. Upper Saddle River, NJ, Prentice Hall, 1996.
  5. Aivazyan S.A., Brodskii B.E. [Macroecometric modeling: Modern trends, problems, an example of the econometric model of the Russian economy]. Prikladnaya ekonometrika = Applied Econometrics, 2006, no. 2, pp. 85–111. (In Russ.)
  6. Aivazyan S.A., Brodskii B.E. et al. [Macroeconometric modeling of the Russian and Armenian economy. I. Peculiarities of macroeconomic situation and theoretical description of dynamic models]. Prikladnaya ekonometrika = Applied Econometrics, 2013, no. 30(2), pp. 3–25. (In Russ.)
  7. Aivazyan S.A., Brodskii B.E. et al. [Macroeconometric modeling of the Russian and Armenian economy. II. Aggregated macroeconometric models of the national economies of Russia and Armenia]. Prikladnaya ekonometrika = Applied Econometrics, 2013, no. 31(3), pp. 7–31. (In Russ.)
  8. Basdevant O. An Econometric Model of the Russian Federation. Economic Modelling, 2000, vol. 17, iss. 2, pp. 305–336. URL: Link00030-9
  9. Benedictow A., Fjærtoft D., Løfsnæs O. Oil Dependency of the Russian Economy: An Econometric Analysis. Economic Modelling, 2013, vol. 32, pp. 400–428. URL: Link
  10. Jensen J., Rutherford T., Tarr D. The Impact of Liberalizing Barriers to Foreign Direct Investment in Services: The Case of Russian Accession to the World Trade Organization. World Bank Policy Research Working Paper Series, 2004, no. 3391.
  11. Merlevede B., Van Aarle B., Schoors K. Russia from Bust to Boom and Back: Oil Price, Dutch Disease and Stabilization Fund. Comparative Economic Studies, 2009, vol. 51, iss. 2, pp. 213–241. URL: Link
  12. Aghion P., Durlauf S. (eds). Handbook of Economic Growth. Amsterdam, North-Holland, 2005.
  13. Taylor J.B., Woodford M. (eds). Handbook of Macroeconomics. Amsterdam, North-Holland, 1999.
  14. Friedman B.M., Woodford M. (eds). Handbook of Monetary Economics. Amsterdam, North-Holland, 2010.
  15. Hubbard R.G. Investment Under Uncertainty: Keeping One's Options Open. Journal of Economic Literature, 1994, vol. 32, iss. 4, pp. 1816–1831.
  16. Tobin J. Denezhnaya politika i ekonomicheskii rost [Money and Economic Growth]. Moscow, Librokom Publ., 2009, 272 p.
  17. Chirinko R.S. Business Fixed Investment Spending: Modeling Strategies, Empirical Results, and Policy Implications. Journal of Economic Literature, 1993, vol. 31, iss. 4, pp. 1875–1911.
  18. Henry P.B. Capital Account Liberalization: Theory, Evidence, and Speculation. Journal of Economic Literature, 2007, vol. 45, iss. 4, pp. 887–935. URL: Link
  19. Sims C. Paper Money. The American Economic Review, 2013, vol. 103, no. 2, pp. 563–584. URL: Link
  20. Bailey M.J. The Welfare Cost of Inflationary Finance. The Journal of Political Economy, 1956, vol. 64, iss. 2, pp. 93–110.
  21. Sargent T.J., Wallace N. Rational Expectations and the Dynamics of Hyperinflation. International Economic Review, 1973, vol. 14, iss. 2, pp. 328–350. URL: Link
  22. Cardoso E. Virtual Deficits and the Patinkin Effect. IMF Staff Papers, 1998, vol. 45, no. 4, pp. 619–646.
  23. Fischer S., Sahay R., Vegh C.A. Modern Hyper- and High Inflations. Journal of Economic Literature, 2002, vol. 40, iss. 3, pp. 837–880. URL: Link
  24. Rossi B. Exchange Rate Predictability. Journal of Economic Literature, 2013, vol. 51, iss. 4, pp. 1063–1119. URL: Link
  25. Bruton H.J. A Reconsideration of Import Substitution. Journal of Economic Literature, 1998, vol. 36, iss. 2, pp. 903–936.
  26. Watsham T.J., Parramow K. Kolichestvennye metody v finansakh [Quantitative Methods in Finance]. Moscow, YUNITI Publ., 1999, 528 p.
  27. Hamilton J.D. Time Series Analysis. Princeton. Princeton University Press, 1994, 820 p.
  28. Fair R.C. Evaluating the Predictive Accuracy of Models. In: Griliches Z., Intriligator M.D. (eds). Handbook of Econometrics, vol. 3. Amsterdam, North Holland, 1986, pp. 1979–1995.
  29. Kiguel M., Liviatan N. The Business Cycle Associated with Exchange Rate-Based Stabilization. World Bank Economic Review, 1992, vol. 6, iss. 2, pp. 279–305.
  30. Carlos A. Végh Gramont. Stopping High Inflation: An Analytical Overview. IMF Staff Papers, 1992, vol. 39, iss. 3, pp. 626–695.
  31. Calvo G.A., Vegh C.A. Inflation Stabilization and BOP Crises in Developing Countries. In: Taylor J., Woodford M. (eds). Handbook of Macroeconomics, vol. C. Amsterdam, North Holland, 1999, pp. 1531–1614.
  32. Tirole J. Illiquidity and All Its Friends. Journal of Economic Literature, 2011, vol. 49, iss. 2, pp. 287–325. URL: Link

View all articles of issue


ISSN 2311-8725 (Online)
ISSN 2073-039X (Print)

Journal current issue

Vol. 17, Iss. 9
September 2018