OECD Economics Department Working Papers
Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
- ISSN: 18151973 (online)
- https://doi.org/10.1787/18151973
A Golden Rule for Russia? How a Rule-Based Fiscal Policy Can Allow a Smooth Adjustment to the New Terms of Trade
The Russian economy continues to grow strongly, buoyed by rising terms of trade, which, in turn, are
supporting a boom in domestic consumption. This paper addresses the challenge that the adjustment to
sustained high oil prices poses for macroeconomic management. It first examines the impact of rising
terms of trade on the domestic economy, particularly with respect to exchange-rate appreciation,
competitiveness and inflation. It then considers the role of monetary and fiscal policies in ensuring a
smooth adjustment to the higher terms of trade. The paper argues that fiscal policy should be the primary
instrument for tackling this challenge. It therefore focuses on the potential role of a fiscal rule in insulating
the economy and the budget from commodity-price fluctuations, and on the management of windfall oil
and gas revenues accumulated in the fiscal Stabilisation Fund.
Keywords: monetary policy, dutch disease, fiscal policy, macroeconomic management, Russia
JEL:
E52: Macroeconomics and Monetary Economics / Monetary Policy, Central Banking, and the Supply of Money and Credit / Monetary Policy;
O23: Economic Development, Innovation, Technological Change, and Growth / Development Planning and Policy / Fiscal and Monetary Policy in Development;
E63: Macroeconomics and Monetary Economics / Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook / Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
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