• A. Apokin, D. Belousov, I. Goloshchapova, I. Ipatova, O. Solntsev — On the Fundamental Deficiencies of Current Monetary Policy
• A. Kolomiets — Inflation and Bank Percent in Contemporary Russian Economy

• B. Korneychuk — M. I. Tugan-Baranovsky’s Ethical Economics and the Challenges of Global Development (To the 150th Birth Anniversary)
• A. Zaostrovtsev — An Economist on History: Deirdre McCloskey’s Perspective

• P. Orekhovsky — Structuralism as a Pamphlet (On the Book by E. Reinert "How Rich Countries Got Rich… And Why Poor Countries Stay Poor". 2nd ed.)

Abstracts

The recent slowdown of the Russian economy has fundamental roots and cannot be overcome by ‘simple’ measures like alleviation of monetary or fiscal policy. The major impediment to growth is marked weakness of the market environment, explained primarily with dominance of state-owned and quasi-state companies. Strong incentives for efforts to enhance efficiency by both business and public administration are required. The key objectives of policies needed to develop a new growth model are listed.

JEL: E6, H11, O1, O4, P4.
Keywords: growth model, oil and gas revenues, soft budget constraints, incentives for growth.

The long-held problems of Russian economy (low economic growth, high inflation, etc.) are now coupled with a new set of issues — sanctions deployed against Russia by the leading Western countries. The new situation reinforces the need for alternative mechanisms which will allow to strengthen economic development in the new environment.

JEL: E52, E58, F34, H61.
Keywords: monetary policy, central banks policy, international lending and debt problems, state budget.

The article considers the impact of international sanctions on the landscape of the Russian banking sector as well as on the economic policy framework. The author concludes that the effect of sanctions on bank lending and funding markets has been asymmetric: in particular, the increase of deposit interest rates has been considerably more moderate, resulting from substantial weakening in the retail funding base since 2013 as well as from the support provided by the Bank of Russia. The key consequence is the strengthening of state banks, which could generate risks for the quality of economic growth.

JEL: G20, E52.
Keywords: sanctions, banking sector, economic policy, Bank of Russia.

The economic effect of EU sanctions against Russia and the retaliatory measures undertaken by Russia are examined. Sanctions fit into the logic of the destructive economic patriotism, which has gained ground under the influence of globalization in the XXI century. This type of patriotism generates autarchy and affects economic development prospects.

JEL: F21, F42, H77, L52, O19, O38, O52.
Keywords: economic sanctions, sectorial restrictions, strategic branches, investment links, foreign capital.

We outline three main shortcomings of current monetary policy in Russia for 2014. First, monetary policy is too strict: we estimate output gap over –3% potential GDP, and rule-based key rate is 6,25%. Second, Bank of Russia in 2014 clearly ignores its second goal of promoting stable and developing financial system. Third, today economic agents lack for clear expectations of monetary policy rules, and it is Bank of Russia’s duty to help forming these expectations — both through public commitments and independent monetary policy review.

JEL: E52, E58, E65.
Keywords: macroeconomic policy, expectations, inflation targeting.

Considering statistical data which characterize dynamics of money supply, inflation and rates of bank percent in the Russian Federation, the author states the lack of expressed dependence of monthly indicators of change of inflation and bank percent on increase or decrease in growth rates of M2. According to the author, inflationary expectations of economic subjects and households are generated, first of all, by institutional uncertainty, characteristic for the system of economic and social relations, which has developed in the Russian Federation, and also by more rapid growth of production costs and prices of energy carriers. Institutional uncertainty­ and instability of financial position of borrowers compel banks to support the reached level of interest rates, including rates of investment credits. In turn, high rates of bank percent stimulate inflationary expectations.

JEL: D84, E42, G20.
Keywords: inflation, prices, percent, money supply, credit, risk, energy carriers, inflationary expectations.

In this paper, the ethical principles of M. I. Tugan-Baranovsky’s economic views and his civic activity are considered within the framework of "moral landmarks" of development. The aim of the paper is to appraise the possible application of this ethical approach in the theory and practice of modern world development. The author concludes that in the period of global economic crisis and institutional transformations this ethical method may be used for designing peaceful ways of solving conflicts based on ethical appreciation of human personality as the highest value.

JEL: В14, В41, Р1, F59.
Keywords: Tugan-Baranovsky, ethical economics, Marxism, nationalism, economic crisis, global economy.

The article analyzes the conception of the history and progress of mankind, presented in recent fundamental research by Deirdre McCloskey. The author stresses the non-materialistic view of institutional change that is characteristic of them. The article examines the controversy with almost all current explanations of the breakthrough of the Western world to the economic growth and prosperity. The paper also presents McCloskey’s own theory that explains this breakthrough by the radical change of rhetoric recognizing the "bourgeois virtues" and the dignity of the bourgeoisie. Attention is drawn to the fact that McCloskey’s views repudiate the predetermined course of history, on the one hand, and its irreversibility, on the other.

JEL: B310, B410, N00, O10, O30, O40.
Keywords: rhetoric of economics, economic development, economic history, bourgeois virtues, bourgeois dignity, freedom.

The review outlines the connection between E. Reinert’s book and the tradition of structural analysis. The latter allows for the heterogeneity of industries and sectors of the economy, as well as for the effects of increasing and decreasing returns. Unlike the static theory of international trade inherited from the Ricardian analysis of comparative advantage, this approach helps identify the relationship between trade, production, income and population growth. Reinert rehabilitates the "other canon" of economic theory associated with the mercantilist tradition, F. Liszt and the German historical school, as well as a reconside­ration of A. Marshall’s analysis of increasing returns. Empirical illustrations given in the book reveal clear parallels with the path of Russian socio-economic development in the last twenty years.

JEL: B40, B41, F10, F13, O10, O30.
Keywords: structural analysis, increasing and decreasing returns, international trade, globalization, protectionism, liberalization.