The Effect of Oil Prices Change on Macroeconomics Performance of Russia in the Period from 1991-2015

The aim of the research is to theoretically and empirically investigate the long-term relationship between volatility of oil prices and economic growth in Russia in the period from 2000 to 2014. While, it is evident from previous studies that oil prices directly and indirectly influence macroeconomic indicators in Russia, the research will focus on the resource course. The main hypothesis, that will be tested, is that Russia has a ‘Dutch disease’. The empirical analysis will test the symptoms of the Dutch disease, which are real exchange appreciation, decline in manufacturing sector, growth in energy sector and wage growth. We will use Johansen’s (1991) co-integration analysis to establish long-run co-integrating vectors. Taking the results of the analysis into an account, the paper further considers several scenarios of the reaction of the Russian economy to exogenous shocks connected with fluctuations in oil prices. At the end the paper proposes important measures for the reduction of negative consequences connected to fluctuations in oil prices and possible economic policy developments.