The Effectiveness of Russia's Monetary Policy: Evaluation by Machine Learning Methods

Student: Kosolapova Kristina

Faculty: Faculty of Management

Educational Programme: Economics (Bachelor)

Year of Graduation: 2024

This research evaluates the effectiveness of Russia's monetary policy (MP) using machine learning methods. It examines the impact of MP instruments on CPI inflation. The paper argues for a broad approach to understanding effectiveness, within the framework of which a new methodology is developed that has not previously been used on Russian data. Using NLP and machine learning, a Central Bank Tonal Decision Index was created, which made it possible to take into account economic crises in the models. The study uses a SARIMA model and machine learning models on 560 observations to determine the most effective MP instruments. Most of the hypotheses put forward were confirmed, which showed the effectiveness of Russia's monetary policy, and the Random Forest turned out to be the best model.

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