How Did The Industrial Revolution Affect Russian Economy

For hundreds of years, natural resources defined the wealth of nations, but it was always technology to control the progress and to define the resources value. The Industrial Revolution changed history cardinally, it marked the new era of coal and steel. Steam boilers and locomotives kick-started world trade and economy. For the first time, the world became divided into developed and developing countries. But it was just a first wave. Internal combustion engines made oil the most important source of wealth in the world. An access to the oil deposits largely determined the destiny of countries in the XX century. Oil was put at the top of the economic and energetic policy.

In XXI century crude oil still remains one of the most important products

Even though the share of hydrocarbon production in the country's GDP has not exceeded 26.5 percent and the share of oil and gas export has not risen above 14.5 percent of GDP for the last 25 years, Russian economist and director of the "Economic policy" program of the Moscow Carnegie Centre Alexander Movchan argues that in reality, if we add percent of import that is paid with earning from oil export, percent of mineral extraction taxes, and the direct influx of petrodollars that is converted into investments, our overall figure will be up to 67-70% of real GDP .

Recently, however, discussion about Russia's oil dependence has become more controversial. It has been argued that the oil price plunging had no negative impact on real GDP growth. But these views were based on a macroeconomic model developed for the Russian Ministry for Economic Development and Trade, so they might have an influence on decision-makers . Hence, there is an additional motivation to examine and elaborate on the

The study of this particular time frame is essential since during just this short period country's economy managed to rise and to fall significantly. There were so-called "golden years" of the Russian economy, the time period from 2000 to 2014 when oil price kept rising. Over the course of these fourteen years, Russia's basic macroeconomic indicators grew considerably, the confidence of its citizens in the state and in institutions in charge of economic stability raised, the government and business elites became increasingly positive with the policy direction adopted by the