Distribution of Monetary and Fiscal Policy Instruments: Economic Growth, Inflation and Factor Productivity

Modern macroeconomic policy is based on the correspondence between goals and instruments, linking specific policy measures with established goals. However, in practice, one instrument can influence multiple goals simultaneously, and in different ways, as well as the structure of economic factors and individual elements. These effects are not considered by the neoclassical theories of economic policy. Therefore, the aim of this study is to provide a picture of how the main instruments of monetary and fiscal policy influence the goals of macroeconomic growth, including the growth rates, inflation, productivity factors and technology. The methodology is the theory of economic policy and growth, the principle of “distributed control”, regression model apparatus. The information base for the study is the data from Rosstat and the Central Bank of Russia. Applying the specified methodology allows us to obtain a general result — a picture of the distributed influence of monetary and fiscal policy instruments in Russia over the period 2000–2023 on target parameters of economic development. The use of the “distributed control” principle allows us to identify a stronger influence of monetary policy than budget policy on the growth rate, in a restraining sense, as well as its weakness in suppressing inflation in the long term, and its restricting nature in influencing total factor productivity. The absence of a significant influence of the two main instruments of macroeconomic policy (monetary and budgetary) on the growth of technological efficiency has been confirmed. While the resources of the national welfare fund, on the contrary, reveal an influence on technological efficiency and no influence on other target parameters considered in the study. The prospect is to assess various lags for different instruments and consider the problem of the joint influence of various instruments, not only on the structure of goals as in this study, but also on the framework of factors and elements of the economy.

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