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Nature and dynamics of the inflationary process in Russia

Authors
Publisher
McGill University
Publication Date
Keywords
  • Inflation (Finance) -- Russia
Disciplines
  • Economics
  • Political Science

Abstract

This thesis makes an analysis of the major inflationary mechanisms that origins from factors inherent to Russia's new economic environment since the beginning of the reform program in January 1992. After some theoretical clarifications over the two different views of the inflationary dynamics, (i.e. the monetary and the fiscal view), an accurate picture of the inflationary structures of the industrial and the financial sector will be made. Then the various factors (other than the January's price liberalization) responsible for the persistence of the high level of inflation in the country will be systematically studied (i.e. firms' soft budget constraint, indexation mechanisms and inflation inertia process, dollarization and depreciation of the ruble, and the use of seigniorage by the government). An anti-inflationary program including an efficient bankruptcy law, a tax-payment and government-bond indexation, is proposed. However, political pressures coming from various coalitions hostile to the economic reform are viewed as what activate the inflationary process in Russia.

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