The article describes the findings on the Russian economy after the reform of 1992 with the application of mathematical models. Part I shows that the state of the economy in 1992-94 can be confidently described applying the new model of an inefficient inflationary equilibrium. This equilibrium emerges due to the lack of investment and insufficient household savings. To overcome this equilibrium, a restructuring of fundamental economic relations is necessary. Part II analyzes one possible strategy for this restructuring on the basis of stimulating productive investment. An engaging feature of this strategy is the creation of investment resources via the conversion of household savings depleted by the 1992 inflation into government debt and their gradual private investment. An analysis of a mathematical model of this process shows that the proposed mechanism can work, but its implementation needs additional policy measures for overcoming both technical inefficiency of the Russian economy and the underdevelopment of its financial institutions.
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