The focus of the study is on generating growth at the macro level and it shows that over the last decades, the Russian growth experience fits well with regular economic models. In particular, investment in physical capital is a key determinant of growth in Russia as it is in other countries. One factor driving domestic investment is FDI. For each dollar of FDI, investments increase by 1.5 dollars, so there is crowding in of domestic investments from FDI. In turn, FDI is affected by the level of uncertainty in the Russian stock market relative to the global market, which means that additional uncertainty is harmful for investment and growth. The study shows that a significant share of the uncertainty is generated by the domestic and foreign policy of Russia, so an important part of Russia’s growth strategy should focus on reducing this home-made uncertainty.

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