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Monetary Policy Transmission Mechanism Action in Russian Practice
During the period of monetary policy easing in Russia, mortgage refinancing became popular, which involves the issuance of a new mortgage housing loan to repay an earlier loan on more favorable terms. There is a regionally heterogeneous refinancing of mortgages at lower mortgage rates. The purpose of this paper is to quantify the impact of monetary easing on mortgage refinancing and household consumption for groups of Russian regions. Econometric methods (vector autoregression models on panel data, estimated by Bayesian methods) and multivariate clustering (hierarchical analysis, k-means method) were used in the paper. Based on the impulse response functions, it is shown that during the period of monetary policy easing, the greatest effect of lowering mortgage interest rates on refinancing is typical for groups of regions with high- and middle-income levels, a liquid housing market, and a developed mortgage market. It is proven that refinancing is involved in the transfer of the effects of monetary policy to consumer spending and consumer lending, and this transfer is heterogeneously. Refinancing in low-income regions stimulates consumption and consumer borrowing. In regions with an average and high level of per capita cash income, after refinancing, consumer spending and consumer loans are temporarily reduced. The obtained results can be explained by the different types of financial behavior of borrowers in the use of top-up mortgage refinancing, depending on the level of their cash income. Based on the results of the study, the hypothesis about the heterogeneity of the refinancing channel in the Russian regions was confirmed. The scientific novelty of the study consists in the development of a methodological approach to the study of the refinancing channel and its approbation on Russian regional data.
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