This paper presents econometric evidence on the determinants of the demand for a
number of rouble and US$ monetary aggregates in Russia and on the stability of these
demand functions and of the estimated parameters. The aggregates considered are rouble
banknotes, rouble M2, US$ banknotes and US$ deposits held at Russian banks. The data
used is monthly and the sample period is May 1993 to January 1997. The econometric
model used is the error correction model (EC-model) which distinguishes between the
long run (cointegrating) relationship among the variables and the short run dynamics.
Particular attention is devoted to measuring the effect of exchange rate changes
or expectations thereof and of political risk on rouble and dollar asset demands.