Russian Experience with the Fiscal and Monetary Policy Interaction within the Budget Rule

This paper investigates the Russian experience with the fiscal and monetary policy interaction in a DSGE-model within a framework of the budget rule. The transition of the Central Bank from the regime of the currency corridor to the free floating of the exchange rate when targeting inflation explains why this research is extremely demanded now. Structurally, the work includes two chapters: a theoretical basis description within the DSGE-model for Russia and an empirical analysis performed by the simulation method to obtain the optimal rule and impulse response functions for the main model variables to shocks from the side of demand, supply and global markets. There is the scientific value of the paper in the modification of the Taylor rule, which corresponds to the modern monetary regime, and the consideration of the stabilization fund actions within the model. This discovery could be employed practically by the central bank and government for better predicting and achieving all the macroeconomic targets and long-term goals of Russia.