Munich Personal RePEc Archive

BUDGET POLICY AND ECONOMIC GROWTH IN RUSSIA. OPTIMAL BUDGET RULE

Skrypnik, Dmitriy (2016): BUDGET POLICY AND ECONOMIC GROWTH IN RUSSIA. OPTIMAL BUDGET RULE.

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Abstract

The article shows that actual public expenditure in the period of rapid oil prices growth of the 2000s was less than optimal level in Russia. The macroeconomic model of Russian economy is the basis of current research. The main mechanism of growth in an optimum scenario is associated with the scaling effect of public expenditure, which increase production possibilities of an economy. Adequate monetary policy allows to prevent unwinding of the inflation spiral and runs the growth spiral. Non-optimality of fiscal policy is a consequence of budget rule mechanism features, which do not take into account the influence of government expenditures on economic growth. The fiscal rule that implements the «closed loop» control and allows to design optimal economic policies for developing countries can become a basis for the system of growth management that combines universal and program planning.

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