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The Bank of Russia at the Crossroads: Does the Monetary Policy Needs Easing

Author

Listed:
  • Eugene Goryunov

    (Gaidar Institute for Economic Policy)

  • Pavel Trunin

    (Gaidar Institute for Economic Policy)

Abstract

This study develops the approach of corruption measurement based on the income-expenditure comparison. Using micro-level data on reported household earnings, expenditures and assets provided by Russian Longitudinal Monitoring Survey for the period 2000-2009 we find that households with workers in the public sector receive lower earnings than their private sector counterparts, but enjoy the same level of consumption expenditures, in other words there exists an expenditure-income gap in favor of the public sector. Controlling for the reported level of earnings, households with workers in the private sector do not show neither a significantly higher probability of possessing country houses, cars and computers, nor living in better housing conditions, nor having higher financial wealth. The analysis of current and accumulated savings, risk aversion and volatility of wages does not show any sign of distinction between two sectors. Thus, differences in assets and precautionary motives of workers cannot reconcile the sizeable expenditure-income gap. Unexplained differences are referred to unreported income, or bribes.

Suggested Citation

  • Eugene Goryunov & Pavel Trunin, 2013. "The Bank of Russia at the Crossroads: Does the Monetary Policy Needs Easing," Working Papers 0069, Gaidar Institute for Economic Policy, revised 2013.
  • Handle: RePEc:gai:wpaper:0069
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    Cited by:

    1. Drobyshevsky, S. & Trunin, P., 2014. "The Evolution of Theory and Practice of Monetary Policy as a Result of the Global Economic Crisis," Journal of the New Economic Association, New Economic Association, vol. 24(4), pages 141-158.

    More about this item

    Keywords

    Central Bank; monetary policy; monetary easing.;

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • 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
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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