Economic Change and Restructuring

, Volume 52, Issue 4, pp 453–474 | Cite as

The role of regional and sectoral factors in Russian inflation developments

  • Elena Deryugina
  • Natalia Karlova
  • Alexey PonomarenkoEmail author
  • Anna Tsvetkova


This paper examines the relative roles of region-specific and commodity-specific developments in the consumer price setting in Russia. For this purpose, we estimate a dynamic hierarchical factor model using inflation rates across regions and sectors. We found little evidence of association between region-specific factors and inflation developments, although there are several regions (mostly located in the Far East and North Caucasus) where the idiosyncratic component may contribute substantially. Conversely, the role of cross-commodity relative price changes in inflation developments in Russia is substantial.


Dynamic hierarchical factor model Regional inflation Relative prices Russia 

JEL Classification

C38 E31 D4 



The views expressed in this paper are those of the authors and do not necessarily represent the position of the Bank of Russia. We are grateful to Yuri Perevyshin, Laura Solanko, the anonymous referees and the participants of the seminars at the Bank of Russia and at the Bank of Finland for their helpful comments and suggestions.


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© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Bank of RussiaMoscowRussia

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