The Monetary and Non-monetary Factors that Influenced Inflation Dynamics in Russia in 2011–2021

Abstract

The article analyzes the ratio of monetary and non-monetary factors and their impact on the dynamics of inflation in Russia in the period from 2011 to 2021. Econometric analysis of the dependence of inflation on various factors was carried out for this period on the basis of quarterly data. Price dynamics was estimated using the CPI (consumer price index) and the GDP deflator. The obtained results were compared with the studies of inflation dynamics in Russia carried out in previous years. Both common and distinctive features of monetary and non-monetary factors were identified. For example, the dynamics of the total CPI in the compared periods was formed under the influence of similar monetary factors, but their share increased: in the period 2011–2021 amounted to 50 %, and in the period 2001–2016 only 40 %. The nature of non-monetary factors in the two periods is noticeably different. In 2001–2016, the dynamics of real incomes of the population and inflation expectations influenced. In 2011–2021, these non-monetary factors lose their influence, giving way to the growth rate of railroad tariffs for freight transportation. The calculations for the GDP deflator confirmed the importance of non-monetary factors in inflationary processes in 2011–2021. When developing anti-inflationary measures, both the Federal Government and the Bank of Russia should take into account the ratio of monetary and non-monetary factors in terms of their short-term and long-term impact on inflation.