Analysis On Monetary Policy Coordination In Eurasian Economic Union[Анализ Механизмов Координации Денежно-Кредитной Политики В Рамках Евразийского Экономического Союза]

In this paper we the synchronization of monetary policy in Eurasian Economic Union. The relevance of the study arises from two points: first, independent monetary policy may be a flexible tool of economic stabilization, so is important for countries; second, fluctuations of Russian economy and global shocks affect all the economies of EAEU, so their monetary policy depends on global and Russian interest rates anyway. The purpose of this paper is to estimate the reaction of EAEU central banks to individual, regional and global shocks. For the empirical model we use monthly data on EAEU key macroeconomic indicators from 2013 to 2021, the basic methods are general method of moments, error correction models and global vector autoregressions. Our results show that the reaction of EAEU countries’ macroeconomic variables to global shocks is by large the same, and spillovers from Russian economy play the key role. We conclude that despite heterogenous production structure, level of capital mobility and financial development the key trends in monetary policy depend on Russian inflation and financial cycle. But the future results will depend on the prospect of trade and financial integration in EAEU under external restrictions. The study can be extended with detailed analysis of capital mobility in EAEU transmission by financial channels.