External Factors for Russia’s Economic Growth: An Overview of Relevant Theoretical and Empirical Studies

The contemporary history of Russia’s economic development encompasses three periods defined by the financial crises of 1998, 2008 and 2014. For an economy dependent on natural resources, it is of no surprise that all crises occurred at times when the external commodity markets experienced unfavourable dynamics, particularly, crude oil. Recently, the negative (anticipated) impact of oil price slump was magnified by the effect of economic sanctions, resulting in a deeper contraction of the Russian economy. As the long-term projections for oil price to remain low dominate, Russia is confronted with its permanent dilemma: to restructure its economy in order to reinvigorate economic growth driven by non-resource factors, or to retain its economic model unchanged in the anticipation of resumption of growth path, backed by oil rents when the oil price recovers. With the latter option almost invariably signifying secular stagnation, Russia’s academia and macroeconomic planners alike are summoned to comprehend the roots of the current economic malaises and elaborate on the future economic development model. This article analyses Russia’s economic situation, outlines relevant theoretical approaches on the effects of resource dependency and economic sanctions on national economy, depicts Russia’s contemporary research on these two accounts and addresses several popular arguments as to what Russia’s prospective economic model should or should not be.