2016. vol. 20. No. 3

In contrast to competition authorities in developed countries, Russian competition authority often applies price cap on domestic wholesale price for large exporting companies. Competition authority issues remedies under merger approval or as a part of infringement decisions. Until recently, remedies are considered almost exclusively as a sign of intention of Federal Antitrust Service, Russian Federation, to expand the influence on markets and to restore price regulation. In this context price remedies never have any positive effects.
We suggest an alternative explanation. Large exporters of raw materials that obtain monopoly power due to mergers or protectionist policies exercise third-degree price discrimination. Prices for domestic customers, that are higher than export prices, decrease social welfare within the country. Price remedy is one of the ways to prevent price discrimination, together with import liberalization and sanctions for excessive prices.
We analyze the impact of incremental market power due to mergers or protectionist trade policies as well as compensatory measures applied by Federal Antitrust Service, Russian Federation, on the markets of metals. As methods for empirical estimations financial event study and difference-in-differences method are applied. None of the instruments – including price remedies, antitrust investigations, the reduction of import tariffs – shows a clear advantage over others. With a reasonable degree of confidence we can only say that the lack of compensatory measures would be accompanied by higher prices in the domestic markets, up to several dozen percent.

I estimate the response of several variables representing business cycle activity to a restrictive shock of monetary policy within a Structural Vector Autoregression (SVAR) model using US quarterly data from 1967:Q1 to 2007:Q4. The monetary policy is measured by the Fe­deral Funds rate, and the response to the Federal Funds rate shock is measured for the following variables: unemployment rate, capacity utilization rate, real GDP growth rate, GDP deflator-based inflation growth rate, commodity price growth rate, long-run interest rate, nominal personal consumption expenditures, gross private domestic investment, and change in private inventories. To identify the monetary policy rule and the monetary policy shock I use assumption that the lagged federal interest rate is included in the policy rule equation, and is excluded from each other equation of the structural model. I also use the usual for the SVAR literature assumption that the structural shocks are uncorrelated. If I include a sufficient variety of variables representing the state of the economic activity, these hypotheses suffice for the partial identification of the monetary policy rule and monetary policy shock, so the impulse response functions for the monetary policy shock can be estimated. I obtain relatively thin confidence intervals for the impulse response functions for the real sector variables, however, the impulse response functions for the inflation rate and for the commodity price growth rate are insignificant or weakly significant. All estimated impulse response functions are consistent with predictions of macroeconomic models with sticky prices. The maximum effect of the restrictive mo­netary policy shock is achieved 2–3 years after the shock, and the effect becomes insignificant after 4–6 years.