Fiscal Rules and Procyclical Fiscal Policy in Russia

Emil Ablaev () and Timur Magzhanov ()
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Emil Ablaev: Department of Economics, Lomonosov Moscow State University
Timur Magzhanov: Department of Economics, Lomonosov Moscow State University

No 39, Working Papers from Moscow State University, Faculty of Economics

Abstract: This article examines the role of fiscal rules in the problem of procyclical fiscal policy. The authors analyze the relationship between fiscal rules and the procyclical nature of federal budget expenditures in Russia in the period from 2003 to 2020. In the course of the work, various specifications of ARDL models were built and evaluated on the basis of quarterly data. The authors show the positive relationship between the fiscal rules and the procyclicality of fiscal policy in Russia. During the periods of functioning of the fiscal rules, federal budget expenditures were, on average, procyclical in relation to the phase of the business cycle. The temporary suspension or cancellation of fiscal rules was associated with an increase in the countercyclicality of federal budget expenditures. The authors conclude that fiscal rules, which aimed at smoothing mainly oil and gas revenues, are incapable of ensuring the implementation of countercyclical fiscal policy in Russia.

Keywords: fiscal rules in Russia; procyclical fiscal policy; quarterly data. (search for similar items in EconPapers)
JEL-codes: E37 E62 H50 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2022-03
New Economics Papers: this item is included in nep-cis and nep-mac
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