Monetary policy on launching new production facilities in Russia: Opportunities in the semiconductor market

Abstract

The paper discusses the capabilities of the Russian monetary system for massive lending to new industries that are of strategic importance to the country and contribute to its technological sovereignty. The key provisions of monetary theory and the concept of multiplier constitute the theoretical basis of the study. Modelling transient processes was used as the main research method. Empirical evidence is official data from the Bank of Russia and the Federal State Statistics Service (Rosstat), as well as industry reports on the global semiconductor market. The authors propose their own model of the transition process, which allows assessing the possible inflation rate and economic growth generated by massive credit investments. Testing the model in the microelectronics industry showed that assumptions about the Bank of Russia possibly losing its control over inflation due to a large-scale lending are unfounded. Even during the first two years, when the construction of a new enterprise is underway and there is an obvious imbalance between the product and money supply, the additional inflation rate caused by this initiative does not exceed 0.5 % per year. We conclude that the regulator has enough reserves to open credit lines for establishing new high-tech enterprises simultaneously in several industries. The proposed model can be used to optimize the public administration system when designing the country’s technological development strategy focused on domestic import substitution.