The article examines the Russian central government’s choice of anti-crisis support measures for its regions. Federal transfers and budget loans, which have been the two most common instruments for providing fiscal assistance to support regions in crisis, are studied in detail. Financial assistance to the regions enables regional budgets to remain balanced, but it may also weaken fiscal incentives. Econometric analysis is applied to assess the effects of supporting regional budgets when their tax and non-tax revenues decreased during the period from 2006 to 2020. Special attention is paid to identifying the differences in support for the regions during the crises of 2008–2009, 2014–2015 and 2020, and the differences in the policies pursued during those crisis periods are subjected to various tests. The results of evaluating the econometric models using data from 2006 to 2020 indicated that there was no significant weakening of fiscal incentives outside the crisis periods. Support increased by no more than 20 kopecks per 1 ruble when regional tax and non-tax revenues decreased outside the crisis periods, although that result is not replicable across changes in the regions sampled and in specifications. The federal support policy for the regions in 2009 and 2020, in contrast to 2015, was mostly a response to the amount of the shortfalls in regional budget revenues. The distribution of transfers in 2020 was largely aimed at compensating for reductions in budget revenues. The paper also highlights the difference in the federal policy depending on a given region’s budget capacity: support for wealthy regions was aimed at compensating for shortfalls in income, while support for low-income regions did not correlate with reduced income. The results of this study are correlated with earlier estimates based on Russian data and extend them with an analysis of the 2020 crisis.

The paper presents an analysis of the consequences of the European Central Bank’s (ECB) unconventional monetary policy measures from 2007 to 2019. Econometric estimates of the effectiveness of the ECB’s policy can be biased for two reasons: first, the entire range of adopted measures may not be considered, and second, unexpected policy actions can prompt economic agents to revise their expectations and perceptions of the ECB’s monetary policy rule. Such an information shock might be mistakenly interpreted as a monetary shock. The approach proposed in the paper combines factor analysis and sign restrictions on high-frequency data in a Bayesian Vector Autoregression (BVAR) model. This approach yields findings that align with macroeconomic theory and offers a more comprehensive insight into the effects of different unconventional monetary policy measures on both financial and real variables. The identification of a monetary shock is carried out in parallel with the identification of an information shock. Unconventional monetary policy measures are approximated using high-frequency factors that influence specific segments of the yield curve. Unconventional ECB measures prove effective in stimulating business activity and price growth as well as in contributing to reduced financial stress. However, there is heterogeneity in their effects. The announcement of quantitative easing exhibits a small external lag with respect to the policy and leads to increased stock prices and lending volumes, indicating the effectiveness of the portfolio rebalancing and credit channels. For measures related to the shorter end of the yield curve, the external lag of the policy can extend up to a year. These measures strongly impact price growth due potentially to effective management of economic agents’ expectations. The consequences of information shocks are moderate and manifest prominently only in the initial months. This limits their ability to offset the effects of monetary policy and does not hinder the ECB’s goal of achieving inflation targets.

The paper analyzes the allocative efficiency of the Russian manufacturing industry. Inefficient allocation between firms arises when there are certain distortions in the market (due to market imperfections or features of economic policy) and can lead to a decrease in the total productivity of the economy. To assess resource allocation efficiency, the authors apply the methodology developed by Hsieh and Klenow and adapt it to the specifics of the Russian economy. Productivity dispersion and covariance between the size and productivity of Russian firms are calculated as the main indicators of allocative efficiency, including at the industry level. High productivity dispersion and low covariance between firm size and productivity within an industry may indicate weak allocative efficiency, which can lower the total productivity of the economy. This analysis shows that the allocative efficiency of Russian manufacturing decreased from 2012 to 2018, especially in the manufacture of coke and petroleum products, wood processing, and production of miscellaneous machinery, equipment, and fabricated metal products. Low allocative efficiency was also evident in the production of basic metals and in the manufacture of motor vehicles. The results of the analysis make it possible to assess the dynamics of allocative efficiency in Russian manufacturing, identify its key determinants, and interpret the results obtained using information about the existing features of operations in different sectors. The paper concludes that several sectors of the Russian economy show potential for increased allocative efficiency; the estimates arrived at should be the basis for more in-depth analysis of industry.

Retailers and manufacturers engage in complex interactions that incorporate various techniques for stimulating demand. Retro payments or rebates are one such technique that is used very intensively in Russia. The regulatory regime in Russia is quite unique in having a separate commercial law regulating the interaction of the various parties involved. The Law on Trade (introduced in 2010 and updated in 2016) limits the amount of the retro payments for retailers, caps the market share of a retailer in a given region, specifies payment terms, and places specific requirements on how counterparties are to be chosen. The main idea behind the model developed in this article is to consider the comparative statics for combinations of strategic variables, which the retailer identifies at a given time. A change in the wholesale price will trigger a simultaneous change in both the front margin and the retro payment. Likewise, a change in the retro payment (due either to changing demand or government regulation) will prompt simultaneous changes in both the front margin and in demand for a branded product (and ultimately in retail prices), as well as in the price for branded products and for a retailer’s private label goods. The amount of retro payment is both a driver of profit for each unit of a branded product sold and also an incentive for the retailer to replace a private label product with an externally branded one. Limiting the amount of retro payments will cause a corresponding increase in the front margin which is needed by the retailer to maintain the same profit on each sale. Based on the results of the model, the authors recommend that direct limitation of any techniques used in commercial transactions be avoided and that regulatory efforts be aimed at ensuring fair competition, that is, equal conditions for all market participants.

The article considers the main techniques for establishing the kind of long-term trust that is necessary for making responsible investments that are consistent with the principles of sustainable development and that will produce the long-term value which is the main goal of corporations participating in sustainable finance. The creation of such techniques is being carried out in close cooperation with international financial organizations and market participants. In order to make current thinking about sustainable financing more systematic, especially as it applies to building long-term trust, the author has concentrated on providing useful descriptions. The article describes the current progress toward standards for the disclosure of non-financial information by corporations; creation of taxonomies for sustainable activities and their application in financial markets; introduction of verification that corporate activities comply with the taxonomies for sustainable activities; and the development and use of ESG ratings in responsible investment. The main research method is analysis of documents of international (including financial) organizations, associations of financial market participants, large business associations, development institutions, and rating agencies. The problematic areas of the mechanisms being constructed are identified (primarily with respect to disclosure of non-financial information and the development of ESG ratings), and the article provides recommendations from international financial organizations on how to overcome the problems identified. The process of developing standards for disclosure of non-financial information and ensuring its reliability, both of which are necessary for sustainable investment, is proceeding rapidly. The article is addressed to a wide variety of readers, who should find it useful for learning how sustainable finance principles are being put into practice by corporations and financial markets. The information in this article can be used for developing strategic economic policy where it intersects with sustainable development.