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Assessing the Impact of Global Hydrocarbon Prices on the Russian Economy Based on the DSGE Model with Capital-Owning Firms

Author

Listed:
  • V. I. Baluta

    (Russian University of Economics)

  • D. N. Shul’ts

    (Infrastructure Economics Center)

  • P. A. Lavrinenko

    (Institute of Economic Forecasting, Russian Academy of Sciences)

Abstract

— The article presents the results of research using the DSGE model, which includes such sectors of the economy as real sector enterprises, households, financial intermediaries, and the monetary regulator. In turn, the household sector is represented by groups of savers and borrowers. Financial intermediaries transform temporarily idle funds of households into loans to enterprises of the real sector, and financial wedges can arise in this link preventing the flow of capital. In the manufacturing sector, there are extractive industries for which the production level is set exogenously in order to adequately reflect the impact of the OPEC+ agreement. A feature of the proposed model is a firm-specific capital approach, which assumes that the owners of the fixed capital are the firms that make investment decisions. In our opinion, this little-studied class of DSGE models is more relevant to the Russian realities than traditional general equilibrium models.

Suggested Citation

  • V. I. Baluta & D. N. Shul’ts & P. A. Lavrinenko, 2022. "Assessing the Impact of Global Hydrocarbon Prices on the Russian Economy Based on the DSGE Model with Capital-Owning Firms," Studies on Russian Economic Development, Springer, vol. 33(1), pages 107-117, February.
    • Handle: RePEc:spr:sorede:v:33:y:2022:i:1:d:10.1134_s1075700722010038
    DOI: 10.1134/S1075700722010038
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    References listed on IDEAS

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    1. Michael Woodford, 2005. "Firm-Specific Capital and the New Keynesian Phillips Curve," International Journal of Central Banking, International Journal of Central Banking, vol. 1(2), September.
    2. David Altig & Lawrence Christiano & Martin Eichenbaum & Jesper Linde, 2011. "Firm-Specific Capital, Nominal Rigidities and the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(2), pages 225-247, April.
    3. Gregory de Walque & Frank Smets & Rafael Wouters, 2006. "Firm-Specific Production Factors in a DSGE Model with Taylor Price Setting," International Journal of Central Banking, International Journal of Central Banking, vol. 2(3), September.
    4. David Altig & Lawrence Christiano & Martin Eichenbaum & Jesper Linde, 2011. "Firm-Specific Capital, Nominal Rigidities and the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(2), pages 225-247, April.
    5. Dmitry Kreptsev & Sergei Seleznev, 2018. "Forecasting for the Russian Economy Using Small-Scale DSGE Models," Russian Journal of Money and Finance, Bank of Russia, vol. 77(2), pages 51-67, June.
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