The Bank of Russia medium-run monetary policy course is to remain unchanged: the regulator will continue its efforts to bring the inflation rate down to 4% in 2017. This follows from the draft of the Guidelines for the Single State Monetary policy in 2016 and for 2017 and 2018. For this goal to...

In May 2014, Russia's stock market continued its steady recovery. As of 26 May, the MICEX Index stood at 1,449.3 points, having grown since the beginning of that month by more than 11%. The growth leader among highly liquid shares were VTB Bank's securities – over the period from 2 May through...

The growth of the MICEX Index over the course of May, briefly interrupted by its small incursion into negative territory in mid-May, was caused by the rise in oil futures prices and the inflow of foreign portfolio investments. However, it was not sufficient to reverse the downward trend in the...

This paper analyzes the Nash equilibrium behavior of risk-averse oligopolistic firms under uncertain demand. It is shown that in the presence of unbiased forward markets the Nash Equilibrium (NE) output increases, that is, forward markets enhance competition. Unlike the competitive or monopoly...

We consider a model with a competitive risk-averse exporting firm who faces uncertain exchange rates in a multiperiod analysis. The capital stock (or fixed input) has to be determined at the outset while the variable input (labor) is chosen optimally at the beginning of each period, but before...

Recent empirical studies (see e.g. Kravis and Lipsev [1977, 1978], Isard [1977], Aspe and Giavazi [1982]) demonstrate that there are notable divergencies between domestic and export prices. This empirical evidence suggests that the law of one price is systematically violated. Kravis and Lipsey...

In this paper we describe a theoretical model of optimal investment of various types of financially constrained firms. We show that the resulting relationship between internal funds and investment is non-monotonic. In particular, the magnitude of the cash flow sensitivity of the investment is...

We address an important business cycle fact, i.e., the amplified and hump-shaped responses of output to productivity shocks, in a dynamic general equilibrium model with financial frictions. Models with financial frictions in the current literature have either the amplification mechanism or the...

The recent financial crisis has highlighted the limits of the "originate to distribute" model of banking, but its nexus with the macroeconomy and monetary policy remains unexplored. I build a DSGE model with banks (along the lines of Holmström and Tirole [28] and Parlour and Plantin [39]) and...