Despite the large economic potential of the Russian oil and gas industry, it is often asserted that the industry has been contributing to economic development less than expected mostly because of ineffective utilization of oil and gas rent. To establish institutions to effectively use the rent is an urgent policy issue in Russia at present. Understanding exactly relations between the industry and the whole economy is a key to design the institution. To analyze the relations, a CGE model including separated production and institutional sectors of the oil and gas industry (ROG-CGM) was constructed. The results of ROG-CGM simulation showed that even a minor change in oil and gas price exerts large influences on the whole Russian economy. We need to update the database of the ROG-CGM, to econometrically estimate parameters in ROG-CGM, and to model the financial side of the economy and investment behavior in order to increase plausibility of the simulation results.
