On politicized theories and their substitution

Abstract

A definition of politicized theory hasbeen introduced. It is an imported theory, the use of which in Russian practice contributes to the economic power of the USA and the EU and does not benefit our economy. One of the politicized theories, in my view, is the Bank of Russia’s theory of a small open economy exporting mainly raw materials. The paper shows that Russia cannot be viewed from this perspective and that the application of the theory of a small open economy hampers economic growth objectives. As an alternative, the paper proposes a concept of long-term banking macro policy of monetary stimulation of economic growth. Its main goal is to find a growth enhancing monetary regime that ensures a compromise between economic growth and inflation in the long run. The solution of the problem of searching for a compromise between growth and inflation is implemented by means of a simulation model of a shifting reproduction regime. The simulation model has shown that the trade-off is feasible due to emission control and is achieved when the GDP growth rate equals the inflation rate. Against the backdrop of sharply strained relations between Russia and the NATO bloc, there is a need for a discussion on the rejection of politicized economic theories. This discussion could also include approach using our model.