Monetary Policy

‘Structural Damage’: New Shocks and Central Bank Policy
Economics
‘Structural Damage’: New Shocks and Central Bank Policy
  |   Irina Ryabova

Central banks have faced a new reality: supply shocks have become the norm, and confidence in low inflation has been shaken. Participants in the New Economic School discussed why a resilient economy is at risk of structural damage and why monetary policy needs a ‘house of brick’.

How Behavioural Economics Changes Monetary Policy Outlook
Opinions
Economics
How Behavioural Economics Changes Monetary Policy Outlook
  |   Philipp Kartaev

The rational expectations hypothesis was the gold standard in macroeconomics for many years. It assumes that people take a realistic view of the future. In fact, people often attach too much importance to short-term trends, which may directly impact a central bank’s policy.

Manufacturing Powerhouse: How Russians View Inflation and the Key Rate
Economics
Manufacturing Powerhouse: How Russians View Inflation and the Key Rate
  |   Alina Evstigneeva

Russians tend to judge inflation by average expenditure rather than ‘visible items’ and describe a ’good economy’ as a self-reliant manufacturing powerhouse. This influences the perception that the key rate is an instrument to support production rather than manage demand.

Lessons of Post-COVID Inflation: How Effective Was Inflation Targeting?
Inflation Targeting
Economics
Lessons of Post-COVID Inflation: How Effective Was Inflation Targeting?
  |   Andrey Sinyakov, Dmitry Chernyadyev, Alexander Morozov

Countries that do not target inflation responded to the post-COVID inflation surge in a similar way to those with inflation targeting (IT), that is by raising policy rates. This crisis-driven convergence is the ultimate test of the IT regime’s efficiency under various conditions.

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.

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