Universitas Muhammadiyah Sidoarjo
Login


Academia Open

 Submit manuscript
Section Business and Economics

Development Prospects and Recommendations for Improving Methods for Assessing Digital Investment Potential

Vol. 11 No. 1 (2026): June :
DOI : https://doi.org/10.21070/acopen.11.2026.13322
Published : Jan 22, 2026

Karakulov Farkhod Zaypudinovich (1)

(1) Graduate School of Business and Entrepreneurship under the Cabinet of Ministers of the Republic of Uzbekistan, Uzbekistan
Fulltext View | Download

Abstract:

General Background: Economic growth represents a fundamental indicator of national development, primarily influenced by macroeconomic variables including inflation rates and banking sector liquidity, which respectively determine price stability and financial intermediation capacity. Specific Background: While previous research has examined inflation and growth relationships independently, the Russian Federation's transition economy provides a unique context for analyzing these dynamics, particularly given its significant financial stability fluctuations between 2000 and 2024. Knowledge Gap: The joint interactive effects of inflation and banking sector liquidity on economic growth remain inadequately explored, especially for transition economies where structural and institutional characteristics differ substantially from developed markets. Aims: This study empirically investigates the relationship between inflation, banking sector liquidity, and GDP growth in the Russian Federation using ordinary least squares regression with robust standard errors and logarithmic transformations applied to annual data from 2000 to 2024. Results: The analysis reveals that inflation exhibits a positive and statistically significant effect on GDP growth (coefficient = 0.507, p = 0.0001 in the log-log-log model with R² = 0.650), while banking sector liquidity demonstrates a weaker, secondary impact requiring cautious interpretation. Novelty: This research uniquely examines inflation and banking liquidity as joint interactive economic phenomena rather than isolated variables, employing comprehensive model comparisons including multiple logarithmic transformation approaches. Implications: These findings suggest that controlled inflation management can stimulate economic activity and sustainable growth, while banking liquidity plays a supportive role, offering valuable guidance for central banks and policymakers in transition economies regarding monetary policy formulation and financial stability management.
Keywords : Economic Growth, Inflation, Banking Sector Liquidity, OLS Regression, Russian Economy
Highlight :










  • Inflation demonstrates positive statistical significance on Russian GDP growth (2000-2024 analysis).

  • Banking sector liquidity shows weaker influence requiring cautious interpretation in growth models.

  • Log-Log-Log transformation achieves highest explanatory power with R² of 0.650.











 






 

Downloads

Download data is not yet available.

References

S. Fischer, "The Role of Macroeconomic Factors in Growth," Journal of Monetary Economics, vol. 32, no. 3, pp. 485-512, 1993, doi: 10.1016/0304-3932(93)90027-D.

R. J. Barro, Inflation and Economic Growth. Cambridge, MA: Harvard University Press, 2013.

M. S. Khan and A. S. Senhadji, "Threshold Effects in the Relationship Between Inflation and Growth," IMF Staff Papers, vol. 48, no. 1, pp. 1-21, 2001.

H. López, "Inflation and Economic Growth: Evidence from Latin America," Economía Mexicana Nueva Época, vol. 17, no. 2, pp. 5-35, 2008.

R. Levine and S. Zervos, "Stock Markets, Banks, and Economic Growth," American Economic Review, vol. 88, no. 3, pp. 537-558, 1998.

A. Demirgüç-Kunt and V. Maksimovic, "Financial and Institutional Development as Determinants of Growth," World Bank Economic Review, vol. 32, no. 2, pp. 1-23, 2018.

J. B. Taylor, "Discretion Versus Policy Rules in Practice," Carnegie-Rochester Conference Series on Public Policy, vol. 39, pp. 195-214, 1993.

R. Lucas, "On the Mechanics of Economic Development," Journal of Monetary Economics, vol. 22, no. 1, pp. 3-42, 1988, doi: 10.1016/0304-3932(88)90168-7.

P. Romer, "Endogenous Technological Change," Journal of Political Economy, vol. 98, no. 5, pp. S71-S102, 1990, doi: 10.1086/261725.

C. Reinhart and K. Rogoff, This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.

World Bank, "World Development Indicators 2024: Macroeconomic Statistics," World Bank Database, Washington D.C., 2024.

International Monetary Fund (IMF), "Financial Soundness Indicators and Banking Liquidity," IMF Global Financial Stability Report, Washington D.C., 2023.

A. A. Shirov, M. S. Gusev, and F. O. Nekrasov, "The Nature of Inflation in the Modern Russian Economy and Its Impact on Economic Growth," Studies on Russian Economic Development, vol. 36, no. 2, pp. 149-160, 2025, doi: 10.1134/S107570072470062X.

V. Rudevska, I. Boiarko, A. Shcherbyna, O. Sydorenko, I. Koblyk, and O. Ponomarova, "The Impact of the Banking System Liquidity on the Volume of Lending and Investment in Government Securities During the War," Financial and Credit Activity: Problems of Theory and Practice, vol. 1, no. 54, pp. 37-50, 2024, doi: 10.55643/fcaptp.1.54.2024.4230.

S. Yüksel, S. Mukhtarov, E. Mammadov, and M. Özsarı, "Determinants of Profitability in the Banking Sector: An Analysis of Post-Soviet Countries," Economies, vol. 6, no. 3, Art. no. 41, 2018, doi: 10.3390/economies6030041.