Nice article in Russian putting Kudrin's monetarist BS into place.
Here are my comments not taken from the article:
Kudrin believes that increase in the money supply leads to inflation. Kudrin is an idiot or malicious. The inflationary
pressure would only be true if the economy was equilibrated and the rate of money supply growth was excessive. There
is no indication of either in the case of Russia.
During the 2000s, Russia saw annual money supply growth of about 50% but the inflation was under 15%. This is what
one would expect under conditions of economic growth and transition from command economy voucher prices to market
prices. The money supply has to grow to reflect the demand for money. The Harvard Boys (Jeffrey Sachs et al.) and
their sycophants like Kudrin claim that the economy can grow without a money supply increase. They are peddling
nonsense, since a static money supply under economic growth would imply negative price increases, i.e. deflation. In
the case of Russia it would have been as if the old Soviet prices would be the new market prices. Maybe such states
are accessible to academic theorists, but not in the real world. Prices in Russia shot up close to western ones for food and
consumer goods. There is no way that the demand for money would be small.
Some nice graphics from the article:
(red line: monetary base, blue line: M2 and green line: inflation)
Note the "paradoxical" year of 2008 when inflation spiked even though there was almost zero money supply growth.
Oh my, look at that correlation between money supply growth (inflation adjusted) and GDP growth.
Kudrin should wrap his dear little head around the reason why prices behave as if there is a single global market. Instead,
he dishes out BS advice that has no relevance to economics on this planet.