Performance Evaluation of the Central Bank Monetary Policy

In this paper the author makes an attempt to assess the effectiveness of the monetary policy conducted by the Bank of Russia. In the course of the work the main ways of influencing the decisions of monetary authorities on the economy were analyzed, as well as the main regimes of monetary policies. In the analysis of the transmission mechanism based on the VAR model it was established that there is only an exchange rate channel that influences inflation and the industrial production. In the framework of the analysis of the expanded VAR which includes factors influencing inflation, we tried to forecast the economic variables so if the Central Bank used alternative scenarios of its policy. During the simulation we did not receive meaningful forecasts that would allow us to accurately talk about the effectiveness of a possible alternative policy. In the results we came to the conclusion that today the Central Bank has a limited impact on the economy, so that it is difficult to assess the effectiveness of its policy. In addition, the constructed model is limited by the number of factors that we can include in it as well as short time series available for analysis.