Abstract
The purpose of this note is to examine the impact of oil price changes on the Russian economy: to what extent does oil price shock influence its gross domestic product (GDP) and the price level? Another goal of this note is to examine the effect of monetary policy. In order to identify the impacts, a vector autoregressive (VAR) model is employed. The time span covered by the series is from the first quarter of 1997 to the third quarter of 2007. Our findings are as follows: when UOP rises 1 per cent, RGDP grows 0.3 per cent. At the same time, the shock leads to a negative 0.4 per cent increase in CPI. The important point to note is the asymmetry of the CPI. It seems reasonable to suppose that this reflects the successful economic policy.
