Russia's Financial Crisis: Causes and Possible Remedies

A prominent Western specialist on the Russian economy surveys underlying causes of the financial crisis that beset Russia in autumn 1997 and intensified in mid-1998. He first discusses several popular explanations for the crisis (ruble overvaluation, falling oil prices, collapsing tax revenues, excessive debt burden), describing why he considers them untenable and then outlines several more plausible explanations (e.g., excessive short-term debt, regional/local government expenditures, proliferation of a barter economy, arbitrary fiscal rule, lack of protection for property rights). The author then analyzes recent international (IMF, World Bank) efforts to assist Russia and outlines additional strategies for mitigating the crisis. Journal of Economic Literature, Classification Numbers: E40, E42, E50, E62. 6 tables, 25 references.