Alexei Vedev Took Part in the 4th International Forum of the Financial University

In his report: the Prospects of Sustainable Economic Growth in the Russian Federation, Alexei Vedev noted that selection of directions of the economic policy suggested the choice between the model of growth driven by expansion of consumption and the model of investment-based growth.

This choice is complicated by factors which are beyond the monetary policy instruments.

So, in case of implementation of the policy which suggested promotion of economic growth driven by domestic demand, that is, through expansion of consumption and lending there is a serious risk of a substantial portion of growth in domestic demand being covered by the imports, particularly, amid appreciation of the rouble exchange rate.

On the contrary, in case of savings being stimulated there is a risk of investments remaining at a low level, so domestic savings will happen to be “unnecessary” for the real sector and the banking sector. The model of investment-based economic growth suggests not only growth in savings, but promotion of investments by means of improvement of the business climate, maintaining of financial stability, introduction of tax privileges, state participation and other factors.

Alexei Vedev summed it up that the economic policy efficiency was declining on the back of institutional limitations.

 Presentation to the report >>>