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INTEREST RATE RULE FOR THE RUSSIAN MONETARY POLICY : NONLINEARITY AND ASYMMETRICITY

Authors
Disciplines
  • Economics

Abstract

This study reconsiders the interest rate rule for the Russian monetary policy, of which no evidence was found in earlier studies. This study successfully estimates an interest rate rule. In order to obtain this result, we follow Surico (2007).s nonlinear approach. The main contributions of this study are as follows. Our empirical results indicate that the Russian monetary policy follows a nonlinear interest rate rule. Further, we clarify the preference of the monetary policy in subsample estimation. When the 1998 financial crisis is considered, Russia.s preference for output expansion is evident. According to Surico, this increases inflation in Russia.

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