Specifics of credit channel functioning of the monetary transmission mechanism in Russia
Subject The subject of the research is the nature of relationship between the financial and real sectors of the Russian economy. Objectives The study aims to identify the reasons for poor response of real GDP dynamics and inflation rate to the monetary policy of the Bank of Russia. The objectives include assessment of effectiveness of the credit channel of monetary transmission, and identification of factors having a negative impact on its functioning. Methods We decomposed the process of serial transmission of impulses from the money market to the market of goods and services. Based on the correlation analysis and calculation of elasticity of indicators that reflect individual stages of functioning of the credit channel of monetary transmission, we determined its effectiveness. We employed structural-and-functional, factorial, and statistical analyses to identify the characteristics of the credit channel affecting the process of monetary transmission in Russia. Results The study shows low sensitivity of variables forming the credit channel of monetary transmission mechanism in Russia, and emphasizes factors that negatively affect its functioning in the domestic economy. Conclusions We offer measures to reduce barriers to the functioning of the credit channel of monetary transmission in Russia. Their implementation will improve the effectiveness of the monetary policy of the Bank of Russia.