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Money and Finance

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Russian Economic Development over Three Centuries

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Abstract

The financial system controlled by the government developed slowly relative to the West Europe in the imperial time. This characteristic seemed to be carried over into the Soviet financial system where the state budget played the main role in financing and bank financing had only a subsidiary role. This pattern of Soviet finance changed in the mid-1960s. Bank financing expanded using household deposits, while the Soviet government turned to be a net absorber of financial resources. This financial system collapsed eventually because of its low use efficiency of funds. After the collapse, the Russian financial system returned to a standard financial system of a market economy, although a sound financial system is still under construction. The monetary and financial data are fragmental and often incomparable, reflecting all these developments in the Russian financial system.

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Notes

  1. 1.

    See Kulisher (2004, pp. 619–643) for the development of monetary system before 1754.

  2. 2.

    25% of the issuance of Chervonets were backed by gold and gold-standard foreign currencies, and the rest was backed by commodities themselves and short-term commodity bills. The exchange rate of Chervonets to gold was fixed. Chervonets was widely traded in the world foreign exchange market (Atlas 1967, p. 215; Arnold 1937, Chaps. 7–9). Chervonets stopped being issued in 1924 and was demonetized in 1947 (Kravtsova 1983, p. 104).

  3. 3.

    In reality, inter-enterprise loans in the form of accounts receivable and payable financed around 20% of all liquid assets of state enterprises throughout the Soviet period (Narkhoz 1968, p. 862; Narkhoz 1981, p. 511; Narkhoz 1991, p. 27). The Soviet government tacitly permitted them for smooth economic activities (Gregory 2004, pp. 226–231).

  4. 4.

    The enforcement of the division between cash and non-cash money was not very effective. See Gregory (2004, pp. 220–221) and Kim (2002).

  5. 5.

    The net financial position of the enterprise sector against Gosbank can be observed as LE–CE in Appendix Table 7.2.

  6. 6.

    Sales of government bonds such as lottery bonds continued in a small scale.

  7. 7.

    Note that the coup d’état led by the conservative fraction occurred in July 1993. It was after the failed coup that the transition to a market economy became the policy strategy more or less established.

  8. 8.

    These figures slightly vary by sources. See Nakamura (1999, p. 125) for details.

  9. 9.

    The present CBR law was enforced in October 2002 (www.cbr.ru/today/bankstatus/. Accessed on 23 July 2019).

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Authors and Affiliations

  1. Graduate School of International Social Sciences, Yokohama National University, Yokohama, Japan

    Yasushi Nakamura

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  1. Yasushi Nakamura
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Correspondence to Yasushi Nakamura .

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Editors and Affiliations

  1. Institute of Economic Research, Hitotsubashi University, Kunitachi, Tokyo, Japan

    Masaaki Kuboniwa

  2. Graduate School of International Social Sciences, Yokohama National University, Yokohama, Japan

    Yasushi Nakamura

  3. Institute of Economic Research, Hitotsubashi University, Kunitachi, Tokyo, Japan

    Kazuhiro Kumo

  4. Research Division, The Economic Research Institute for Northeast Asia, Niigata, Japan

    Yoshisada Shida

Appendix

Appendix

Appendix Tables 7.1 and 7.2 are available at www.ier.hit-u.ac.jp/histatdb/projects/view/2.

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Nakamura, Y. (2019). Money and Finance. In: Kuboniwa, M., Nakamura, Y., Kumo, K., Shida, Y. (eds) Russian Economic Development over Three Centuries. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-13-8429-5_7

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  • DOI: https://doi.org/10.1007/978-981-13-8429-5_7

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