The authors examine the essential theoretical components of MMT, its policy recommendations and reasons for gaining popularity in advanced economies. Fundamental features of MMT are concerned, namely the specifics of modern fiat monetary systems’ functioning, stock-flow consistent modeling, and the role of government and private sector in the creation of aggregate demand. The necessity to separate methodology and ideology of MMT for distinguishing between its theoretical presumptions and macroeconomic recipes is emphasized. It is claimed that economic policy recommendations of MMT do not follow directly from the overall correct description of fiat monetary system. In particular, the applicability of MMT to the Russian economy, as well to other emerging economies, is analyzed. These economies are offered to rethink their policies using the principles of monetarily sovereign government. Their policymakers need to shift priorities from balancing the budget to decreasing the dependence on capital flows and foreign trade. MMT-style options of stimulating economic growth and reaching the “genuine” full employment are in the epicenter of current macroeconomic debates in academia and the political sphere. The paper discusses the main critical arguments against MMT which appeared in Russian economics journals. It is stated that the existing critique is not enough for “debunking” MMT, but at the same time several weak points have not been taken into account.

Being a source of budget revenues, financial repression discourages investment and overall economic activity. Apart from its direct impact on economy, financial repression can adversely influence financial sector efficiency. Such policy can discourage the financial sector’s development by reducing its profits. This study proposes an approach to account for this fact in a DSGE model. In this model the role of the financial sector lies in overcoming the information asymmetry problem between lenders and borrowers. By investing in monitoring technology development, the financial sector can increase its efficiency and reduce the external finance premium. However, the financial sector’s incentives to invest depend on market characteristics; thus, an indirect effect of financial repression emerges. The model is calibrated for the US economy. A permanent increase of financial repression revenues significantly reduces the long-run output. Almost a half of reduction in output comes from discouraging financial sector investments in monitoring. The reason is that financial repression makes investments in monitoring less beneficial by reducing the size of the corporate credit market. Temporary financial repression tightening does not have such a substantial impact on economic activity. Moreover, in this case the financial sector efficiency channel is negligible in a linearized DSGE model. A comparison of financial repression multipliers with those of distortionary taxes demonstrates that the former are the lowest during the first quarters after the shock. If a longer time period is taken into account, financial repression can be a comparatively efficient source of a temporary budget revenues increase if the ratio of government debt to capital is not too high.

The main task of the paper is to assess income inequality in the light of regional differences in the incomes’ purchasing power and their potential to provide for the needs of individuals in households of varying size and composition. The accuracy of inequality measurements is critical to sound social policymaking on curbing inequality as a hindrance to social progress. The inequality indicators, adjusted to reflect regional variation in the cost of living and in the household size and composition, have allowed us to assess public living standards based on the actual purchasing power of household incomes and their sufficiency to meet the needs of individual household members. We have applied the regional purchasing power parities of the Russian ruble and a modified OECD equivalence scale to adjust the nominal income. The calculations drew on the microdata of a sample survey of household incomes and social program participation. By matching the distribution parameters for adjusted and nominal income values, the authors have built a framework for assessing the impact of regional variations in cost of living and household size as factors in income inequality. The paper presents the results of pilot estimates of the impact on income distribution, adjusted to take into account the regional cost of living variations and the equivalence scales. The authors have demonstrated a viable method of measuring the impact of the aforesaid factors on the drift of income strata across the country, and shown the dependence of national inequality indicators on territorial disparities in consumer price levels and demographic profiles of regional societies.

The article is devoted to the analysis of conceptual issues related to the development strategy of the North Caucasus region. These issues are pressing again because of the failure of the North Caucasus Strategy, confirmed by the audit of the Accounts Chamber of the Russian Federation. The analysis shows that the roots of the identified problems are related not to the wrong choice or configuration of the instruments stimulating accelerated growth in the region but to the inadequate character of the whole model of “modernization from above” as it is referred to in the article. This model is oriented to the implementation of large investment projects supported by the state and financed by investments outside the region. Despite attempts at “modernization from above” being ineffective not only in the North Caucasus region, but in other developing areas as well, and the modernization itself having significant downsides, the strategy is still perceived by many as a plausible policy toward stimulating economic development. The “grassroots modernization” model, based on internal rather than external resources of the region, is considered as an alternative. The state in this model facilitates the improvement of the investment climate and removal of the barriers to local businesses’ development as well as creation of an “enabling environment” in which local economy can grow and flourish. The issues of shadow economy legalization, stimulation of cooperation and formation of development infrastructure are discussed using the approaches of “grassroots modernization.” Relevant examples of international experience are used in the analysis, including the best and the worst practices of support for accelerated growth in Southern Italy as well as the experience of shadow economy legalization in several countries.

When publishing press releases on earnings, a company can either reliably disclose additional information, or mislead the investor, hiding or, conversely, embellishing the facts. In this study, the authors assess the impact of the press release tone on a company’s financial performance. The empirical base of the study includes quarterly financial indicators of Russian companies as well as semantic, linguistic and substantive features of quarterly press releases (in English and Russian) for 2015–2019. As part of this work, to assess the impact of disclosing a company’s prospects in press releases on its financial results, an authors’ dictionary was created, designed as a library in the R environment; the final list consists of 373 words. The positive and negative coloring of the text in English was assessed by two dictionaries, namely Loughran and McDonald (LM), and Mohammad and Turney (NRC); the assessment of the sentiment of press releases in Russian was assessed by EcSentiThemeLex dictionary for assessing economic and financial texts; and complexity of the text was graded via the Bog Index. Panel regression was used to assess the impact of financial and textual factors on a company’s financial performance. It was found that press releases are getting longer, accompanied by comments from managers and, in general, becoming more meaningful. As far as managers are concerned, domestic managers fairly truthfully consecrate real information about the state of affairs in the company in press releases and do not manipulate information. Investors also trust press releases about the company’s future results, and tend to respond positively to the positive tone of the publications as well as to statements related to the disclosure of the company’s prospects.