IDEAS home Printed from https://ideas.repec.org/a/url/izvest/v23y2022i2p125-141.html
   My bibliography  Save this article

The impact of the inflation-targeting regime on the economic development of an industrial region

Author

Listed:
  • Polina S. Kuklinova

    (Ural State University of Economics, Ekaterinburg, Russia)

  • Vladimir V. Ilyashenko

    (Ural State University of Economics, Ekaterinburg, Russia)

Abstract

The priority goal of Russia’s monetary policy is keeping inflation close to the target. Within the inflation-targeting regime, the monetary policy is adopted at the national level and therefore, is uniform for all regions of the country. However, differentiation of inflation rates between regions characteristic of Russia’s economy gains even greater importance under the enacted policy, because inflation targeting produces different effects on the sustainability of the economic development of regions with different industrial structures. The paper aims to study the impact of the inflation-targeting regime on the economic performance of the Sverdlovsk oblast, which belongs to old industrial regions. The methodological basis of the research consists of the theoretical propositions of economic theory and macroeconomics. The authors use correlation and factor analysis, methods of observation and comparison. According to the findings, implementing inflation targeting since 2015 has permitted to reduce inflation and keep it down in the Sverdlovsk oblast. However, it has also contributed to the deterioration of the key indicators reflecting its economic development. The study concludes that despite being effective in terms of reducing inflation, the said regime impedes sustainable economic development of the industrial region.

Suggested Citation

  • Polina S. Kuklinova & Vladimir V. Ilyashenko, 2022. "The impact of the inflation-targeting regime on the economic development of an industrial region," Journal of New Economy, Ural State University of Economics, vol. 23(2), pages 125-141, July.
    • Handle: RePEc:url:izvest:v:23:y:2022:i:2:p:125-141
    DOI: 10.29141/2658-5081-2022-23-2-7
    as

    Download full text from publisher

    File URL: https://jne.usue.ru/images/download/95/eng/7.pdf
    Download Restriction: no
    File URL: https://jne.usue.ru/en/issues-2022/1161
    Download Restriction: no
    File URL: https://libkey.io/10.29141/2658-5081-2022-23-2-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Paula De Masi & Vincent Koen, 1996. "Relative Price Convergence in Russia," IMF Staff Papers, Palgrave Macmillan, vol. 43(1), pages 97-122, March.
    2. Guenter W. Beck & Kirstin Hubrich & Massimiliano Marcellino, 2009. "Regional inflation dynamics within and across euro area countries and a comparison with the United States [‘On the relevance and nature of regional inflation differentials: The case of Spain’, Banc," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 24(57), pages 142-184.
    3. Andrea Vaona & Guido Ascari, 2012. "Regional Inflation Persistence: Evidence from Italy," Regional Studies, Taylor & Francis Journals, vol. 46(4), pages 509-523, June.
    4. Elena Deryugina & Natalia Karlova & Alexey Ponomarenko & Anna Tsvetkova, 2019. "The role of regional and sectoral factors in Russian inflation developments," Economic Change and Restructuring, Springer, vol. 52(4), pages 453-474, November.
    5. Hasan Engin Duran & Burak Dindaroğlu, 2021. "Regional inflation persistence in Turkey," Growth and Change, Wiley Blackwell, vol. 52(1), pages 460-491, March.
    6. Barry K. Goodwin & Thomas J. Grennes & Christine McCurdy, 1999. "Spatial price dynamics and integration in russian food markets," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 3(2), pages 157-193.
    7. Ligia Topan & César Castro & Miguel Jerez & Andrés Barge-Gil, 2020. "Oil price pass-through into inflation in Spain at national and regional level," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 11(4), pages 561-583, December.
    8. Bruce L. Gardner & Karen M. Brooks, 1994. "Food Prices and Market Integration in Russia: 1992–93," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(3), pages 641-646.
    9. I. Arnold & C.J.M. Kool, 2004. "The Role of Inflation Differentials in Regional Adjustment: Evidence from the United States," Working Papers 04-13, Utrecht School of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Victoria P. Litvinets, 2023. "Inflation Targeting and Economic Growth in Developed and Developing Countries: Evaluation of the Policy Effectiveness Using CS-ARDL Approach," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 22(4), pages 814-833.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. K. P. Gluschenko, 2021. "Long-Term Evolution of Russia’s Market Integration," Studies on Russian Economic Development, Springer, vol. 32(1), pages 78-86, January.
    2. Konstantin Gluschenko, 2016. "Distribution dynamics of Russian regional prices," Empirical Economics, Springer, vol. 51(3), pages 1193-1213, November.
    3. Konstantin Gluschenko, 2003. "Market integration in Russia during the transformation years," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 11(3), pages 411-434, September.
    4. Konstantin Gluschenko, 2010. "Anatomy of Russia’s market segmentation1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(1), pages 27-58, January.
    5. Gluschenko, Konstantin, 2006. "Russia's common market takes shape: price convergence and market integration among Russian regions," BOFIT Discussion Papers 7/2006, Bank of Finland Institute for Emerging Economies (BOFIT).
    6. Ana María Iregui & Jesús Otero, 2013. "A Spatiotemporal Analysis of Agricultural Prices: An Application to Colombian Data," Agribusiness, John Wiley & Sons, Ltd., vol. 29(4), pages 497-508, September.
    7. Konstantin Pavlovich Gluschenko, 2007. "Price Linkages of Russian Regional Markets," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 48-60.
    8. Konstantin Gluschenko, 2004. "The Evolution of Cross-Region Price Distribution in Russia," William Davidson Institute Working Papers Series 2004-716, William Davidson Institute at the University of Michigan.
    9. Hinz, Julian & Monastyrenko, Evgenii, 2022. "Bearing the cost of politics: Consumer prices and welfare in Russia," Journal of International Economics, Elsevier, vol. 137(C).
    10. Arnade, Carlos Anthony & Osborne, Stefan, 2001. "Measurement And Testing For Neutrality Of Foreign Price And Cpi Transmission In Russia," 2001 Annual meeting, August 5-8, Chicago, IL 20625, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Coleman, Simeon, 2012. "Where Does the Axe Fall? Inflation Dynamics and Poverty Rates: Regional and Sectoral Evidence for Ghana," World Development, Elsevier, vol. 40(12), pages 2454-2467.
    12. Nikolsko-Rzhevskyy, Alex & Ogrokhina, Olena, 2018. "Behavior of retail prices in common currency areas: The case of the Eurozone," Economic Modelling, Elsevier, vol. 69(C), pages 49-57.
    13. Gluschenko, Konstantin, 2006. "Russia's common market takes shape : price convergence and market integration among Russian regions," BOFIT Discussion Papers 7/2006, Bank of Finland, Institute for Economies in Transition.
    14. repec:zbw:bofitp:2006_007 is not listed on IDEAS
    15. repec:lic:licosd:15204 is not listed on IDEAS
    16. Konstantin Gluschenko, 2009. "Goods market integration in Russia during the economic upturn," Post-Communist Economies, Taylor & Francis Journals, vol. 21(2), pages 125-142.
    17. Gluschenko, Konstantin, 2017. "The Moscow market in the country’s economic space," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 48, pages 5-21.
    18. Götz, Linde & Glauben, Thomas & Brümmer, Bernhard, 2013. "Wheat export restrictions and domestic market effects in Russia and Ukraine during the food crisis," Food Policy, Elsevier, vol. 38(C), pages 214-226.
    19. Paweł Gajewski, 2017. "Sources of Regional Inflation in Poland," Eastern European Economics, Taylor & Francis Journals, vol. 55(3), pages 261-276, May.
    20. Konstantin Gluschenko, 2021. "Spatial pattern of Russia’s market integration," Spatial Economic Analysis, Taylor & Francis Journals, vol. 16(4), pages 449-470, October.
    21. Berkowitz, Daniel & DeJong, David N., 2003. "Regional integration: an empirical assessment of Russia," Journal of Urban Economics, Elsevier, vol. 53(3), pages 541-559, May.
    22. Glushchenko Konstantin, 2004. "Integration of the Russian Market. Empirical Analysis," EERC Working Paper Series 04-06e, EERC Research Network, Russia and CIS.

    More about this item

    Keywords

    regional inflation; Sverdlovsk oblast; industrial region; monetary policy; inflation targeting;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:url:izvest:v:23:y:2022:i:2:p:125-141. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Victor Blaginin (email available below). General contact details of provider: https://edirc.repec.org/data/usueeru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.