Monetary Policy

Three Challenges for Monetary Policy
Opinions
Economics
Inflation Targeting
Three Challenges for Monetary Policy
  |   Alexander Morozov ,  Andrey Sinyakov

The degree of monetary tightening for a sustainable disinflation depends not only on the inflation rate, but also on the conditions that have led to its rise. There are three reasons why considerable monetary tightness might need to be maintained even when inflation decelerates.

‘Macrotelegram’: Bank of Russia Perception Index
Opinions
‘Macrotelegram’: Bank of Russia Perception Index
  |   Alisa Polekhina, Anna Guseva

More and more people around the world are getting news from social media. For regulators, this is an opportunity to receive feedback in real time. In our study, we show this by building an index that reflects how Telegram users channels perceive the Bank of Russia’s decisions.

What Information Impacts Inflation Expectations: Evidence from a Randomized Controlled Trial
Opinions
What Information Impacts Inflation Expectations: Evidence from a Randomized Controlled Trial
  |   Vadim Grishchenko, Maria Lymar, Andrey Sinyakov

Unlike in other countries, inflation expectations in Russia are unresponsive to low inflation data of previous years, an experiment has found. This makes it imperative to ensure sustainably low inflation and prove that price stability is achievable.

‘Price Stability Forever’: Central Banks’ Words and Goals
Economics
‘Price Stability Forever’: Central Banks’ Words and Goals
  |   Econs

Why does a central bank need a Telegram channel, what makes the Russian economic information space special, how are inflation expectations managed, does AI help the Bank of Russia write press releases – these are key points from the discussion hosted by New Economic School.

Odysseus, Oracle, and Central banks
Opinions
Odysseus, Oracle, and Central banks
  |   Mansur Abdurakhmanov

Central banks have a system for announcing the future path of monetary policy: forward guidance. It contributes to the reducing uncertainty in the economy and decreasing market volatility and helps economic agents adjust to expected changes in advance.

Leg, Trunk or Ear: How to Assess Central Bank Transparency
Opinions
Leg, Trunk or Ear: How to Assess Central Bank Transparency
  |   Alina Evstigneeva

In the last decades, economists have created a number of indices of central bank transparency. However, all of them target a professional audience. We have built a new index to cover regulator efforts to communicate with a broader audience.

How to Identify “Visible Items”
Opinions
Inflation Targeting
How to Identify “Visible Items”
  |   Vadim Grishchenko, Nadezhda Ivanova

People’s inflation expectations are often based on the dynamics of prices for certain goods and services called “visible items”. For Russians, these visible items include durables such as cars and clothes, and also petrol, housing maintenance and public transport fares.

Why Modern Central Banks Talk So Much
Opinions
Why Modern Central Banks Talk So Much
  |   Alina Evstigneeva

Have central banks opened up due to the increased openness of the authorities or the developments of new media? This is not the case. Openness was a response to unprecedented shocks that has helped to withstand such shocks when traditional tools have turned out to be ineffective.

Transparency of Monetary Policy: Optimal Level
Opinions
Transparency of Monetary Policy: Optimal Level
  |   Philipp Kartaev

The more clearly businesses and households understand the central bank's policy, the closer their inflation expectations are to the target. However, it is possible for monetary policy to be excessively transparent, which can bring more harm than benefit.

The Power of Bad News: How Mass Media Influences Inflation Expectations
The Power of Bad News: How Mass Media Influences Inflation Expectations
  |   Alina Evstigneeva

Negative news in the media covering the overall economic situation may act as a meaningful predictor of the dynamics of Russians’ inflation expectations and their current inflation perceptions. These are most driven by news about the ruble exchange rate and economic crisis.

What is open to the Bank of Russia, while remaining closed for analysts?
What is open to the Bank of Russia, while remaining closed for analysts?
  |   Alina Evstigneeva, Yuliya Shchadilova, Mark Sidorovsky

A central bank may have an information advantage enabling it to better forecast macroeconomic indicators and, hence, make decisions that are not expected by the market. This advantage may exist both in reality and solely in the form of the market’s belief in it.

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