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International monetary policy transmission in EAEU countries

Author

Listed:
  • Dobronravova, E.

    (Russian Presidential Academy of National Economy and Public Administration (RANEPA), Moscow, Russia
    Lomonosov Moscow State University, Moscow, Russia)

  • Trunin, P.

    (Russian Presidential Academy of National Economy and Public Administration (RANEPA), Moscow, Russia
    Gaidar Institute for Economic Policy, Moscow, Russia)

Abstract

The paper presents the analysis of the channels and potential impact of Russian monetary policy on the economies of Eurasian Economic Union members. Theoretical literature highlights three key groups of international transmission channels: international trade, migration of labor and financial channels. Our research demonstrates the significant impact of monetary policy shock in Russia on the economies of EAEU. International trade channel stands out as a key transmission channel: monetary tightening in Russia leads to the decrease in economic activity in the member states as a result of the reduction in exports of those countries, while currency depreciation, expected by economic theory, was not detected. Despite of synchronization of the interest rates, we couldn't find much evidence of high capital mobility between EAEU countries, which is the main precondition on the efficiency of financial channels of international monetary transmission. This leads to the conclusion that such behavior of interest rates might occur due to the common inflationary pressures, associated with business-cycles synchronization, strengthening of mutual trade and long-term investment.

Suggested Citation

  • Dobronravova, E. & Trunin, P., 2024. "International monetary policy transmission in EAEU countries," Journal of the New Economic Association, New Economic Association, vol. 62(1), pages 219-228.
    • Handle: RePEc:nea:journl:y:2024:i:62:p:219-228
    DOI: 10.31737/22212264_2024_1_219-228
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    References listed on IDEAS

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    More about this item

    Keywords

    monetary policy; cross-border monetary spillovers; international monetary transmission; economic integration; Eurasian Economic Union (EAEU);
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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