“Structural Transformation” of the Russian Economy and Economic Policy

The article examines structural shifts in the Russian economy caused by external sanctions restrictions and reactions of the Russian government in the period after February 2022. The specifics of changes in the allocation of resources between sectors of the economy are described in the context of the theory of structural transformation. The features of the current transformation in Russia are revealed, in particular, a general decrease in efficiency and well-being, including due to the intensification of the development of industries focused on the government demand, as well as relative changes in profitability, which determines the volume of investments in fixed assets. It notes the limited capacity of public policy to directly stimulate transformation and justifies measures that, after mitigating the initial shocks, should be aimed at facilitating the market-driven reallocation of productive resources. This requires efforts to manage state-owned companies, infrastructure policy, as well as measures to develop financial markets and the non-banking sector.