DOI: 10.33917/es-2.200.2025.30-41

The article examines the problem of ensuring Russia’s economic growth in the context of a rigid monetary policy and a high key interest rate through implementation of the “supply-side economics” doctrine. The aim of the study is to demonstrate the emerging limitations for the “supply-side economy” when raising the key interest rate and the impossibility of intensifying economic growth in a sustainable and balanced format with such macroeconomic policy. Methodology is based on the modern theory of economic growth and the macroeconomic policy that stimulates it, the «supply-side economics» doctrine.

The information base of the study is formed by data from Rosstat and the Bank of Russia, scientific works on «supply-side economy». The overall result is that the article shows the effect of rigidity of the aggregate demand decline with an increase in the key interest rate, difficulty in balancing supply and demand. Increase in the interest rate in the area of its high values may cause greater decrease in supply than in demand, which is determined by sensibility of these parameters to the interest rate and other policy instruments. Such an effect can neutralize the policy of extinguishing inflation by strongly increasing the key interest rate and lead to a significant slowdown in economic growth. It is shown that negative impact of the key interest rate on aggregate supply and the search for a new point of economic equilibrium with lower price dynamics, but also relatively lower GDP, since the magnitude of its growth will be lower, favor significant limitation for implementing the “supply-side economics” doctrine in modern Russia. Moreover, the “supply-side economy” in the Reagan’s version, based on the monetarism theory, will also experience structural limitations, which, together with such a policy, can sharply weaken the competitive prospects of the Russian economy.

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DOI: 10.33917/es-6.198.2024.48-55

The article dwells on the policy of the Central Bank of Russia to suppress inflation and ensure stable economic growth. The purpose of the study is to identify the impact of the key interest rate on inflation and economic growth in Russia, to specify the negative consequences of its increase. Methodology is based on the theory of monetary policy and economic growth. The overall result obtained is that the current policy of increasing the k ey interest rate in Russia has a negative impact on economic development and is less successful in suppressing inflation than some economists and analysts expect. Moreover, it slows down economic growth, reproduces the growth of inequalit y over a long period, revealing a weakly positive effect in influencing inflation and a negative cumulative ef fect on the rate of economic growth. The approach from the perspective of “distributed control” and the cumulative ef fect, used in the article, makes it possible to reveal the joint dynamics of a number of relevant parameters that characterize and reflect the content and ef fectiveness of monetary policy in Russia. The proposal is that various policy instruments should be subordinated to the task of the real economy growth, supplying it with financial capital, against which the policy of a debt economy with a high interest rate works.

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