Measuring the Inflation Level in Conditions of Macroeconomic Instability

Tatyana A. Burtseva (), Alexander A. Frenkel (), Boris I. Tikhomirov () and Anton A. Surkov ()

Economics of Contemporary Russia, 2022, issue 4

Abstract: The article presents methodology for assessing the level of inflation in the Russian economy, based on the use of mathematical and statistical methods, based on the use of aggregated (integral) inflation indices that characterize the dynamics of business processes in the main areas of the national economy. The purpose of the publication is to justify the need to use an expanded composition of indices that more fully characterize the country's strategic development, including economic, financial and monetary regulators, which have become the main objects of the Western sanctions policy in the new geopolitical reality. Despite the compliance of the methodology of inflation meters in the Russian economy with the recommendations of international organizations, during the period of financial and macroeconomic instability, the applied inflation indicators ambiguously reflect the situation of ongoing inflation processes in various sectors of the national economy. As a result, the quality of analytical work is reduced by institutions for the real sector development, which reduces the effectiveness of decisions made by business entities and government bodies. The article shows that the aggregated inflation index as an integral measure calculated on the basis of partial inflation indicators makes it possible to more accurately determine changes in the level and quality of life through price dynamics in the most significant national economic complexes compared to the consumer price index, which characterizes the lower limit of the cost of living. The results of the work were the conclusions of the authors, obtained by analyzing the calculations of the time series of aggregated and partial inflation indices. The necessity of periodic adjustment of the composition of private indicators taken into account in the formation of the aggregate inflation index is substantiated by including new, more relevant indicators and excluding indicators that have lost their topicality. The article recommends considering the aggregate inflation index as a target inflation indicator and using it when determining the key rate of the Bank of Russia, amount of pensions, the subsistence level, the minimum wage and a number of other macro-indicators of strategic development.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ack:journl:y:2022:id:822

DOI: 10.33293/1609-1442-2022-4(99)-63-76

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