Youth Conference Opens with Lecture by Bank of Russia Expert

On May 14th, the International Conference of Students, Postgraduates, and Young Scientists "Economics Through the Eyes of the Young" opened at IEM TSU with a lecture by an invited expert — Leonid Markov, Doctor of Economic Sciences and Advisor to the Economic Directorate of the Siberian Main Directorate of the Bank of Russia (Novosibirsk). The audience learned about the complex evolution of monetary policy from passive regimes to modern inflation targeting, as well as the central role of the Central Bank in ensuring price stability and sustainable economic growth.

Today, the main monetary policy regime is inflation targeting, which was first implemented by New Zealand in 1989. This regime has proven its effectiveness, contributing to lower price growth rates and stable GDP. In Russia, the target inflation rate is 4%, and the transition to this regime took six years, completing in 2015.

The primary constitutional function of the Bank of Russia is to protect and ensure the stability of the ruble, which is interpreted as maintaining price stability (low inflation). The principles of Russian inflation targeting include a publicly announced target of 4%, a floating exchange rate as an automatic stabilizer, as well as the use of the key interest rate and Central Bank communication as key tools.

Leonid Markov explained that the Central Bank's role is to minimize deviations from sustainable economic growth rates by smoothing cycles of overheating and recession. He detailed the monetary policy transmission mechanism, showing how changes in the key interest rate, through interest rate, exchange rate, and other channels, affect aggregate demand and, ultimately, inflation. In conclusion, the speaker debunked some common myths about monetary policy, such as regarding the Central Bank's role in calculating inflation or the significant influence of interest costs on investment.