How Commodity Price Shocks Affect the Economy and What Predicts Negative Net Worth of Banks: The New Issue of the Russian Journal of Money and Finance Is Out

The second issue of the Russian Journal of Money and Finance for 2020 is now available.

Rising commodity prices can cause a credit boom in a commodity-exporting economy leading to a systemic crisis when commodity prices fall. Monetary and macroprudential policies can curb dangerous credit growth. But should they complement each other or rather be substitutes, meaning that tightening of one policy should be accompanied by easing of the other? The paper by Ivan Khotulev and Konstantin Styrin (Bank of Russia) shows that in a small open economy, the optimal policy mix requires that monetary and macroprudential policies complement each other. In a closed economy, they tend to be substitutes.

The paper by Natalia Turdyeva (Bank of Russia) examines the influence of the decline in prices of export goods on the Russian economy. The author creates several hypothetical scenarios of this decline and evaluates its impact on consumer welfare and on Russian GDP. The paper also analyzes how a fall in export prices may affect each of the 52 Russian industries.

This issue closes with two papers on banking supervision. Mikhail Mamonov (MGIMO and CERGE-EI) analyzes how imbalances in the maturity structure of Russian banks’ transactions can predict negative net worth of banks and its expected magnitude. Henry Penikas (Bank of Russia, National Research University Higher School of Economics, and Lebedev Physical Institute of the Russian Academy of Sciences) examines the benefits of distinguishing a low default portfolio class for banks that use the internal rating-based approach in the framework of Basel II and Basel III.