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Fiscal Rules and Procyclical Fiscal Policy in Russia

Author

Listed:
  • Ablaev Emil

    (Department of Economics, Lomonosov Moscow State University)

  • Magzhanov Timur

    (Department of Economics, Lomonosov Moscow State University)

Abstract

This article examines the role of fiscal rules in the problem of procyclical fiscal policy. The authors analyze the relationship between fiscal rules and the procyclical nature of federal budget expenditures in Russia in the period from 2003 to 2020. In the course of the work, various specifications of ARDL models were built and evaluated on the basis of quarterly data. The authors show the positive relationship between the fiscal rules and the procyclicality of fiscal policy in Russia. During the periods of functioning of the fiscal rules, federal budget expenditures were, on average, procyclical in relation to the phase of the business cycle. The temporary suspension or cancellation of fiscal rules was associated with an increase in the countercyclicality of federal budget expenditures. The authors conclude that fiscal rules, which aimed at smoothing mainly oil and gas revenues, are incapable of ensuring the implementation of countercyclical fiscal policy in Russia.

Suggested Citation

  • Ablaev Emil & Magzhanov Timur, 2022. "Fiscal Rules and Procyclical Fiscal Policy in Russia," Working Papers 0039, Moscow State University, Faculty of Economics.
    • Handle: RePEc:upa:wpaper:0039
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    More about this item

    Keywords

    fiscal rules in Russia; procyclical fiscal policy; quarterly data.;
    All these keywords.

    JEL classification:

    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General

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