Analysis of approaches to determining the optimal level of inflation with inflation targeting[Анализ Подходов К Определению Оптимального Уровня Инфляции При Инфляционном Таргетировании]

The purpose of this workpaper is to estimate the range of inflation rates for Russia that are consistent with the concept of optimal inflation, as well as to compare the obtained estimations with the corresponding estimates for other countries and the target value of the Bank of Russia. The first section identifies and analyzes the main factors affecting the optimal lvel of inflation in the framework of theoretical works, including factors determining the positivity of the optimal level of inflation. The second section presents a classification of the main empirical approaches used to estimate the optimal level of inflation and the analysis of their advantages and disadvantages. The third econometric section provides estimations of the threshold level of inflation obtained on various samples of panel data, including Russia. The conclusion summarizes the main results of the workpaper. The results of this workpaper can be used by the Bank of Russia in assessing key parameters of monetary policy, such as the inflation target, as well as for the development of the main directions of the unified state monetary policy.