Russian devaluation in 2014–2015: Falling into the abyss or a window of opportunity?

Mironov, Valeriy

doi:10.1016/j.ruje.2015.12.005

Cited by 13 publications

(6 citation statements)

References 29 publications

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“…Besides, falling government revenues constrain access to imported products, increasing their prices in the domestic markets. As an example, Mironov (2015) examines the devaluation in Russia after the collapse of oil prices in the second half of 2014 and notes that inflation rose as a response. Also, recently Sek (2019) examines the asymmetric pass-through from oil price changes to domestic inflation for five oil-importing countries and five oil-exporting countries over the 1965–2014 period.…”

Section: Notesmentioning

confidence: 99%

The impact of oil price shocks on Turkish sovereign yield curve

Çepni

Gül

Yılmaz

et al. 2021

IJOEM

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PurposeThis paper aims to investigate the impact of oil price shocks on the Turkish sovereign yield curve factors.Design/methodology/approachTo extract the latent factors (level, slope and curvature) of the Turkish sovereign yield curve, we estimate conventional Nelson and Siegel (1987) model with nonlinear least squares. Then, we decompose oil price shocks into supply, demand and risk shocks using structural VAR (structural VAR) models. After this separation, we apply Engle (2002) dynamic conditional correlation GARCH (DCC-GARCH (1,1)) method to investigate time-varying co-movements between yield curve factors and oil price shocks. Finally, using the LP (local projections) proposed by Jorda (2005), we estimate the impulse-response functions to examine the impact of different oil price shocks on yield curve factors.FindingsOur results demonstrate that the various oil price shocks influence the yield curve factors quite differently. A supply shock leads to a statistically significant increase in the level factor. This result shows that elevated oil prices due to supply disruptions are interpreted as a signal of a surge in inflation expectations since the cost channel prevails. Besides, unanticipated demand shocks have a positive impact on the slope factor as a result of the central bank policy response for offsetting the elevated inflation expectations. Finally, a risk shock is associated with a decrease in the curvature factor indicating that risk shocks influence the medium-term bonds due to the deflationary pressure resulting from depressed economic conditions.Practical implicationsOur results provide new insights to understand the driving forces of yield curve movements induced by various oil shocks to formulate appropriate policy responses.Originality/valueThe study contributes to the literature by two main dimensions. First, the recent oil shock identification scheme of Ready (2018) is modified using the “geopolitical oil price risk index” to capture the changes in the risk perceptions of oil markets driven by geopolitical tensions such as terrorism and conflicts and sanctions. The modified identification scheme attributes more power to demand shocks in explaining the variation of the oil price compared to that of the baseline scheme. Second, it provides recent evidence that distinguishes the impact of oil demand and supply shocks on Turkey's yield curve.

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Section: Notesmentioning

confidence: 99%

The impact of oil price shocks on Turkish sovereign yield curve

Çepni

Gül

Yılmaz

et al. 2021

IJOEM

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“…Thus, the country is forced to drain its own resources to finance its status (Karatnycky, Motyl, 2015). The current expansionist attempt of the Russian leadership and its consequences have direct impact on the well-being of the population (Mironov, 2015). The devaluation of the Russian ruble, the embargo against fresh produces from Europe or the travel restrictions imposed by the Kremlin could lead to social and political unrest amongst the Russian middle class (Dreger et Al., 2016).…”

Section: Reality Principlementioning

confidence: 99%

Are Empires Striking Back? A Political and Cultural Comparison of the European Union and Russia

Dumetz

2016

Economics and Culture

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The article is a position paper focusing on the current standoff between two regional powers, the European Union and Russia. Following a series of crises, in particular the annexation of Crimea by the Russian Federation in 2014, the relationship between Russia and many of its neighbours has significantly deteriorated. This shift has led to various geopolitical opinions, often opposite and seemingly irreconcilable. A holistic and historical approach to this new reality leads some to question the validity of the current world order through the prism of the anachronistic concept of Empires. Subsequent to a review of definitions, the author analyses historical characteristics and political factors of the two territories on focus: the European Union and Russia. There are two outcomes of this study: On the one side, the European Union has become an organisation that shares many characteristics of an Empire, but several key elements exclude it from this political construction. On the other side, the geopolitical actions of Russia have shaped the position of the country into a structure that bears many of the artefacts of an Empire with key essential features. The conclusion of this argument states that the European Union is not an Empire by design, despite many resembling features; whilst Russia lives in an anachronistic paradigm of an Empire, without having the means of being one.

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“…For instance, Rautava (2004) estimates that a 10% real appreciation is associated with a 2.4% decline in Russian output. However, others are skeptical that the recent real devaluation of the Russian currency will be able to promote growth in the face of structural problems (Mironov, 2015). In the case of China, Yan et al.…”

Section: Introductionmentioning

confidence: 99%

Regional real exchange rates and growth: Evidence from resource‐based regional economies

Tochkov

2020

Rev International Economics

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Regional economies in emerging countries vary greatly in terms of their global integration. External shocks, therefore, require adjustment mechanisms that reflect local conditions. This paper focuses on the role of real exchange rates (RER) in the economic performance of regions. In particular, we use monthly data to construct RER for 77 Russian regions over the period 2000–2016. The results validate the adoption of a regional perspective by showing nontrivial differences across regions. Oil‐producing and resource‐based regional economies experienced much larger RER movements and higher volatility. Overall, RER appreciated steadily until a major drop in 2008, and then, again in 2014. Growth regressions show that RER depreciations have a stimulating effect on regional performance but only in the short run. These results confirm previous findings indicating that RER are a key facilitating factor but not a major determinant of growth and are thus unlikely to produce sustainable development.

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Russian devaluation in 2014–2015: Falling into the abyss or a window of opportunity?

Cited by 13 publications

References 29 publications

The impact of oil price shocks on Turkish sovereign yield curve

The impact of oil price shocks on Turkish sovereign yield curve

Are Empires Striking Back? A Political and Cultural Comparison of the European Union and Russia

Regional real exchange rates and growth: Evidence from resource‐based regional economies

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