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Impact of Oil Price Shocks on Russian Macroeconomic Performance

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  • Ayaz Zeynalov

Abstract

This study examines the significant influence of oil price fluctuations on the economies of oil--exporting countries. While elevated oil prices can result in foreign currency inflows and advantages for oil-exporting countries, they can also trigger adverse effects, including a reduction in manufacturing sectors and a loss of price competitiveness due to currency appreciation. This research focuses on the period from 2004Q1 to 2021Q4, examining the influence of oil price fluctuations on key macroeconomic indicators in Russia, including industrial production, exchange rates, inflation and interest rates. The structural VAR model findings confirm that the monetary channel demonstrates a higher degree of responsiveness to oil price shocks compared to the fiscal channel. Specifically, the study observes that industrial production exhibits a pronounced procyclical response to oil price shocks through the fiscal channel. Conversely, the monetary channel reveals that increased oil price volatility exerts pressure on the Russian rouble, resulting in a counter-cyclical behaviour in inflation and interest rates.

Suggested Citation

  • Ayaz Zeynalov, 2024. "Impact of Oil Price Shocks on Russian Macroeconomic Performance," Politická ekonomie, Prague University of Economics and Business, vol. 2024(4), pages 676-701.
    • Handle: RePEc:prg:jnlpol:v:2024:y:2024:i:4:id:1412:p:676-701
    DOI: 10.18267/j.polek.1412
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    References listed on IDEAS

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    2. Victoriia Alekhina & Naoyuki Yoshino, 2019. "Exogeneity of world oil prices to the Russian Federation’s economy and monetary policy," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(4), pages 531-555, December.
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    More about this item

    Keywords

    Oil price shocks; macroeconomic trends; Russian economy;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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