ISSN (print) - 0131-7652

ISSN (online) - 2686-7605

Vol. 56 No. 1 (2026)
Cover story: the “Price” of Prices

Dynamics of Price Flexibility: Theoretical Models, Empirical Analysis and Implications for Economic Policy

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  • V.S. Shcherbakov,
  • M.Yu. Yakovina
V.S. Shcherbakov
Ural Main Branch of the Bank of Russia; Omsk State University named after F.M. Dostoevsky
M.Yu. Yakovina
Omsk Division of the Siberian Main Branch of the Bank of Russia
DOI: https://doi.org/10.30680/ECO0131-7652-2026-1-60-73

Published 2026-01-29

Keywords

  • рrice flexibility; economic policy; transmission mechanism; economic shocks; price stability; price rigidity; inflation

How to Cite

1.
Shcherbakov В, Yakovina М. Dynamics of Price Flexibility: Theoretical Models, Empirical Analysis and Implications for Economic Policy. ECO [Internet]. 2026 Jan. 29 [cited 2026 Jan. 30];56(1):60-73. Available from: https://ecotrends.ru/index.php/eco/article/view/4940

Abstract

This paper offers a comprehensive investigation of price flexibility in the case of the Russian economy. The study constructs a composite price flexibility index and analyzes its dynamics for the period 2002–2025. It shows that the time series of the index exhibits both a long-term structural trend and short-term cyclical fluctuations closely associated with inflationary shocks. To formally assess the impact of these cycles on macroeconomic dynamics, the paper employs a Threshold Vector Autoregression (TVAR) model. This methodology allows us to identify two distinct regimes– “stable” and “turbulent” – in the economy depending on the deviation of price flexibility from its trend. Within this framework, the study examineshow short-term relationships between inflation, the policy rate, and the exchange rate change when transitioning between regimes.
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