WORKING PAPER SERIES Elena Deryugina The role of regional and Natalia Karlova sectoral factors in Russian Alexey Ponomarenko Anna Tsvetkova inflation developments No. 36 / July 2018 WORKING PAPER 2 The role of regional and sectoral factors in Russian inflation developments SERIES Elena Deryugina Bank of Russia. Email:
[email protected] Natalia Karlova Bank of Russia. Email:
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[email protected] Authors are grateful to Yuri Perevyshin, Laura Solanko, the anonymous referees and the participants of the seminars at the Bank of Russia and at the Bank of Finland for their helpful comments and suggestions. All errors that might be present in the paper are those of the authors. © Central Bank of the Russian Federation, 2018 Address: 12 Neglinnaya street, Moscow, 107016 Tel.: +7 495 771-91-00, +7 495 621-64-65 (fax) Website: www.cbr.ru All rights reserved. The views expressed in this paper are solely those of the authors and do not necessarily reflect the official position of the Bank of Russia. The Bank of Russia assumes no responsibility for the contents of the paper. Any reproduction of these materials is permitted only with the express consent of the authors. WORKING PAPER 3 The role of regional and sectoral factors in Russian inflation developments SERIES Abstract This paper examines the relative roles of region-specific and commodity-specific developments in the consumer price setting in Russia. For this purpose, we estimate a dynamic hierarchical factor model using inflation rates across regions and sectors.