Two turns in economics during last decades are analyzed — complexity turn, and information turn, and the narrative analysis role for these turns realization is discussed. Basic framework of narrative analysis is described, and it is shown that its efficacy is limited by groups of individuals which have resources that give them possibilities to treat the narrative’s plot as a feasible alternative in decision-making situation. It is grounded that now agent-based models are the effective instrument for theoretical and empirical research under turns to complexity or information alike.

Is the Bank of Russia able to control inflation and, at the same time, manage aggregate demand using its interest rate instruments? In other words, are empirical estimates of the effects of monetary policy in Russia consistent with the theoretical concepts and experience of advanced economies? This paper is aimed at addressing these issues. Unlike previous research, we employ “big data” — a large dataset of macroeconomic and financial data — to estimate the effects of monetary policy in Russia. We focus exclusively on the period after the 2008—2009 global financial crisis when the Bank of Russia announced the abandoning of its fixed ruble exchange rate regime and started to gradually transit to an interest rate management. Our estimation results do not confirm standard responses of key economic activity and price variables to tightening of monetary policy. Specifically, our estimates do not reveal a statistically significant restraining effect of the Bank of Russia’s policy of high interest rates on inflation in recent years. At the same time, we find a significant deteriorating effect of the monetary tightening on economic activity indicators: according to our conservative estimates, each of the key rate increases occurred in March and December 2014 had led to a decrease in the industrial production index by about 0.2 percentage points within a year.

The paper studies the impact of inflation on income inequality in Russian regions. It was revealed that the reduction in inflation from double-digit rate to the Bank of Russia’s target did not help to mitigate inequality, but rather exacerbated it. We identified a group of products which changing price dynamics affects inequality. The price increase may lead to the decline in inequality through redistributive effect. It is shown that in Russia this effect is associated with the channel of unexpected inflation that results in real wealth transfer from more prosperous lenders to less well-off borrowers. The policy of inflation targeting, successfully implemented by the monetary authorities in recent years, has reduced the volatility of inflation and limited the operation of this channel. At the same time, quantitative estimates of the increase in inequality as a result of achieving price stability remain relatively low.

The paper provides a critical assessment of an authoritative study “From Soviets to oligarchs” (2017) on evolution of economic inequality in Russia by F. Novokmet, T. Piketty and G. Zucman where Russia is portrayed as a country with abnormally polarized income distribution by international standards. The author examines main quantitative results obtained by Piketty’s team, describes peculiar methodological features of their measuring procedure and analyzes how they dissect available empirical data sets. A general conclusion is that the trio uses an unconventional methodology that does not allow to apply equivalence scales; their argument suffers from internal inconsistencies (different units of observation and different definitions of income are used); they misunderstand the nature of data that form a base for their calculations (simulated estimates are perceived as raw survey data, post-tax incomes as pretax ones, etc.); deduction and declaration coefficients that they impose on tax data are empirically improbable; their final estimates of income inequality for Russia are higher than empirically realistic ones approximately by one third (Gini coefficients 0.5—0.6 instead of 0.3—0.4 by other researchers).

The article examines the global and Russian experience in analyzing the influence of concentration and competition on the functioning of the banking sector, including the mortgage market. The information on housing loans issued by banks in the regions of Russia is used and the level of concentration in the regional housing lending markets is estimated. It is shown that regional housing loan markets are highly concentrated. It has been revealed that the concentration level negatively affects the dynamics of housing lending in the regions of the country. High concentration is also associated with slightly higher lending interest rates and their smaller spread. This may be the evidence that high concentration hinders the development of lending in the regions of Russia, which means that the level of competition in the banking sector is insufficient.

The article considers the nature and limits of the impact local fiscal decentralization exerts on private fixed capital investments in resource-rich Russia’s regions. The relevance of this topic is due, firstly, to the fact that sufficient expenditure and revenue powers at the local level ensure sustainable economic development, and secondly, the lack of research on relationship between investments and local fiscal decentralization in Russia. The study confirms the existence of an inverted U-shaped curve in the investment-decentralization association for the group of resource-rich regions as well as the superiority of revenue decentralization over expenditure decentralization in terms of its impact on economic development. For 2009—2016, investments were the highest when local fiscal decentralization was 46—47% and 43—51% in expenditure and revenue aspects, respectively (for Russia as a whole, 35—36% and 33—34%). Tax revenues in those figures do not exceed 30 p.p., the rest is occupied by earmarked grants (subsidies) and, especially, general-purpose grants (“dotatsii”). The excess of the optimal level of revenue decentralization over the expenditure one in resource-rich regions is explained by drivers of relatively large local powers there — less dependence on federal transfers, low regional tax burden, and greater elasticity of regional fiscal policy to external factors. The overall excess of optimal levels in comparison to Russia as a whole is explained by high local demand for both differentiation of expenditures and intraregional intergovernmental redistribution in those regions. Reduction of fiscal decentralization for 2008—2018 curbed private investment. The greatest losses were incurred by lack of revenue decentralization in the resource-rich regions, which could have reached more than 80% of the median investments.

A growing activity has recently been watched in the sphere of central bank digital currencies (CBDC) creation, dictated by the desire of monetary authorities to increase the efficiency of payment systems and create an alternative to stablecoin projects like Libra. The paper discusses various types of CBCDs. Special attention is paid to potential risks and benefits associated with the emission of CBDCs, as well as their consequences for the banking sector and monetary policy. The first important issue associated with CBDC emission is the potential reduction of the role of the traditional banking system. The second issue is the change in the functioning of the monetary transmission channels as a result of the CBDCs emission. The third problem arises from the fact that in the event of a crisis some economic agents will prefer to transfer their funds from commercial banks to the CBDCs because they are less risky. This situation is expected to lead to instability of balances on deposit accounts in commercial banks. The problems listed are closely interrelated, and the significance and balance of risks and benefits associated with CBDCs emission are not completely obvious. At the same time CBDCs have a potential to become a new effective tool of monetary authorities in case of their proper design.