Russia: Collapse and Recovery

Posted: 7 Jul 2002

See all articles by Brian Henry

Brian Henry

University of Oxford - Department of Economics; Birkbeck College

Evgeny Gavrilenkov

National Research University Higher School of Economics


The financial collapse in Russia in the summer of 1998 was a profound shock to the efforts to reform the Russian economy. It was also thought that it would seriously worsen the short- and medium-term outlook for growth and inflation. In this article, Brian Henry and Evgeny Gavrilenkov argue that the most recent data show that the more pessimistic of these views were probably misplaced; modest but significant growth has been evident since the collapse without substantial increases in inflation. The real improvements, in so far as they are simply the results of devaluation and the beneficial effects of the increase in the world oil price, could prove to be temporary, although there are more hopeful indicators with the recent increases in investment. But to ensure sustainable recovery, fundamental improvements in the structure of the economy, especially in the areas of industrial and financial restructuring, are needed. Meanwhile, they argue that it would be very beneficial for medium-term prospects if progress is made on the twin problems of external debt reduction and tax reform.

Suggested Citation

Henry, Brian and Gavrilenkov, Evgeny, Russia: Collapse and Recovery. Available at SSRN:

Brian Henry (Contact Author)

University of Oxford - Department of Economics ( email )

Manor Road Building, Manor Road
The Centre for International Macroeconomics
Oxford OX1 3UL
United Kingdom

Birkbeck College ( email )

7-15 Gresse Street
London, WC1E 7HX
United Kingdom

Evgeny Gavrilenkov

National Research University Higher School of Economics

Myasnitskaya street, 20
Moscow, Moscow 119017
7 095 928 88 90 (Phone)
7 095 921 87 11 (Fax)

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