Two-circuit national monetary and financial system as a tool for overcoming sanctions problems: modeling and forecasting

Objective: to analyze the possibilities of overcoming the problems of the Russian economy related to sanctions through the introduction of a two-circuit national monetary and financial system using digital financial assets; to assess the effectiveness of such a system to stimulate economic growth, reduce inflation and ensure financial stability under the sanctions pressure.

Methods: the analysis uses methods of mathematical modeling of the Russian economy dynamics, taking into account the interaction of the financial and manufacturing sectors. A system of differential equations is used to describe the cash flows in the economy, as well as scenarios with different levels of investment and CFA issuance.

Results: mathematical modeling was used to analyze the prospects for Russia’s economic development under the Western sanctions policy. It showed that, although the emergency anti-sanctions measures taken by the Russian government since the beginning of the special military operation have proven effective, in the long term a significant change in monetary and financial policy is necessary, as the existing rules and methods of its implementation do not contribute to solving the problems that have arisen. The article uses mathematical modeling to study the effect of introducing a two-circuit monetary and financial system using digital financial assets. The calculations have shown that the use of a two-circuit system together with an active investment policy significantly increases the Russian economy efficiency (even under Western sanctions), saturating it with money for GDP growth and at the same time reducing the inflationary pressure of a growing money supply.

Scientific novelty: the authors propose a new financial system that combines digital assets and dual goods to ensure the economy sustainability under the sanctions. The authors also developed a mathematical model that makes it possible to assess the long-term consequences of the two-circuit national monetary and financial system and compare it with traditional financing methods.

Practical significance: the results of the analysis and mathematical modeling can be used in the implementation of the monetary and financial policy in the Russian Federation under the sanctions. The introduction of the two-circuit system will make it possible to target financial resources to the manufacturing sector, reduce inflation and ensure the ruble exchange rate stability.

1. Malkov, S., Davydova, O., & Shturo, V. (2024). Russia under economic sanctions: modeling and forecast. Informaczionnye voyni, 2, 49–56. (In Russ.).

2. Ryabukhin, S. N., Minchenkov, M. A., Vodianova, V. V., Zapletin, M. P., & Zhuravlev, P. V. (2024a). Modern financial instruments traded in national economies. Russian Economic Journal, 2, 46–71. (In Russ.).

3. Ryabukhin, S. N. (2023). New financial instruments and technologies that allow for an asymmetric response to the challenges and threats to the Russian economy from the collective West. Scientific Works of the Free Economic Society of Russia, 3(241), 396–400. (In Russ.). https://doi.org/10.38197/2072-2060-2023-241-3-396-400

4. Ryabukhin, S. N., Minchenkov, M. A., Vodyanova, V. V., & Zapletin, M. P. (2020). Dual-circuit monetary and financial system as a tool for developing the national economy of the Russian Federation and ensuring its sovereignty. Scientific Works of the Free Economic Society of Russia, 5(225), 182–200. (In Russ.). https://doi.org/10.38197/2072-2060-2020-225-5-182-200

5. Ryabukhin, S. N., Minchenkov, M. A., Kokorev, I. A., Meletidi, K. L., & Lyukshin, A. M. (2024b). Digital Financial Assets as a Tool for International Payments. The World of New Economy, 18(2), 59–68. (In Russ.). https://doi.org/10.26794/2220-6469-2024-18-2-59-68

6. Ryabukhin, S. N. (2022). New financial instruments and technologiesin the context of global transformations. Scientific Works of the Free Economic Society of Russia, 3(235), 105–108. (In Russ.). https://doi.org/10.38197/2072-2060-2022-235-3-105-108

7. Malkov, S. Yu., & Davydova, O. I. (2019). Mathematical model for analyzing the interrelation between monetary circulation and economic growth in developing countries. Actual Problems of Economics and Law, 13(1), 981–992. (In Russ.). https://doi.org/10.21202/1993-047X.13.2019.1.981-992

8. Malkov, S. Yu., Starkov, N. I., & Davydova, O. I. (2023). Socio-economic projections of defense spending: Development vs security. Moskow: LENAND. (In Russ.).

9. Maevsky, V. I., Malkov, S. Yu., Rubinstein, A. A., & Krasilnikova, E. V. (2020). Theory of capital reproduction and non-neutrality of money. Moscow; Saint Petersburg: Nestor-Istoriya. (In Russ.).

10. Maevsky, V. I., Malkov, S. Yu., & Rubinstein, A. A., (2016). New theory of capital reproduction: development and practical application. Moscow; Saint Petersburg: Nestor-Istoriya. (In Russ.).

11. Ryabukhin, S. N., Minchenkov, M. A., Vodyanova, V. V. et al. (2023). Dual goods. Moskow: Nauchnaya biblioteka. (In Russ.).