Correlation of Financial Markets and It Significance for the New Silk Road: The Case of Russia

Abstract

The integration of countries and regions into global economic processes, among which we can mention The Belt and Road Initiative, is significantly affected by the existing interconnections of national financial markets. The paper gives a detailed analysis of the relation between the dynamics of the Russian stock market (based on the RTS index) and changes in external economic factors of the real and financial sectors. We propose to divide the period of the study (from 2002 to 2018) into different economic activity phases, which will allow to estimate the structure of the factors of the RTS index dynamics during pre-crisis, crisis and post-crisis periods. We used a correlation analysis of time series of indicators to analyze the structure of factors. We demonstrate that the structure of external factors of the real sector of the economy underwent changes as a result of the financial and economic crisis in 2008, just the relation between the RTS index and oil prices remained. In the period of Russian economy recovery from 2009 to 2014, the relation between the Russian market and the US consumer price index is again revealed. In the crisis of 2014, the structure of the external factors of the real economy became similar to that from 2002 to 2008. Conclusions are drawn that significant changes concerned the external financial factors structure influencing the Russian market only during the recovery of the domestic economy from 2009 to 2014. The practical implication is that the nature of world crisis is associated with globalization of financial markets. And overcoming global recession can be solved by means of international coordination of financial and economic policies.