New policy responses to Russia's inflation

Overview

The Russian economy is overheating, but the roots of the problem are domestic in origin, not foreign, as was the case earlier. This means the usual policy recommendation – “let the ruble appreciate” – is wrong. The government will have to find a new set of policies to address these emerging inflationary problems.

Tinkering with fiscal policies is off limits, what with elections on the way and the recently signed three-year budget targeting a substantial fiscal stimulus of 3-4 per...