In several steps we come to influence estimation of exchange rate on GDP and
employment. We consider several facts about influence of exchange rate, M2 or M0, and oil
price on deflators. Than we build a model of Russian Economics considering at least four
different sectors with import and export. Some equations is easier to calculate in nominal
(money) values, some in real units. So in fact we need booth equations in real and nominal
variables and we definitely need deflator model to come from one presentation to other.
We use a key regression connecting one kind of import to consumption ratio and ratio of two key deflators one of which is import deflator with deterministic regression quality. And since they both depends from real exchange rate (&M0) we get the model of most important way of influence
of exchange rate and M0 (or M2) growth on GDP.
We argue that current central bank policy with inflation targeting is destroying Russian
economics.