The purchasing power of the ruble: problems of regional differentiation and the ways of their solution

The article studies the problem of regional differentiation of the price level and the purchasing power of money in Russian regions. We have considered the interpretations of price stability as a goal of monetary policy and investigated the problem how to determine the purchasing power of modern money. The relationship between the purchasing power of modern money and wages is proved. We have studied the experience of the German Federal Bank in the sphere of institutional procedures to implement monetary policy at the regional level. The possibilities to use the convergence criteria of the European Community in the practice of equalizing the socio-economic development of Russian regions are studied. In terms of regional differentiation of the price level and the purchasing power of the Russian rouble, it is possible to reach a new level of the harmonization of monetary and fiscal policy using institutional transformations and the targets aimed at equalizing the levels of the socio-economic development of Russian regions. We offer to expand the powers of the territorial institutions of the Bank of Russia and use the guidelines for the harmonization of monetary and fiscal policies adapted to Russian conditions. The initially modified convergence criteria of the EU should be used as the targets of the economic development of regions. We propose to use the following three landmarks. The first landmark could be an indicator of price stability. It should be measured by the average inflation rate of the corresponding region in the last 12 months, which is equal to the performance of three or five regions having the lowest levels of inflation. The second landmark could be the limitation of the excessive deficit of regional budgets. The limitation should be established as the percentage of the domestic regional product. The third landmark should be adherence to long-term interest rates at a certain level, which is formed in the same three or five regions of the country with a minimum level of inflation. We are sure that the current problems of Eurozone countries cannot discredit the effectiveness of the convergence criteria, because the initially envisaged economic leverage for their violation were ironed out as a result of political decisions.