Journal of Applied Economic Research
ISSN 2712-7435
Analysis of the Effect of Structural Shocks on the Endogenic Variables of a Compact Regional Dynamic Model
Serkov L.A.
Abstract
The development of regional dynamic models is of scientific and practical interest for finding ways to effectively use the resource potential of the regions. In this article, for the purpose of formalizing regional development processes, it is proposed to consider the dynamic stochastic model of the region and the impact of structural external and internal shocks on regional indicators within the framework of this model. The parameters of the model are estimated by the Bayesian method on the basis of statistical data of the economy of the <st1:city w:st="on" style=""><st1:place w:st="on">Sverdlovsk</st1:place></st1:city> region. In developing the model and analyzing the impact of external and internal shocks on regional indicators, economic and mathematical methods and methods of computer modeling were used. The model considers five types of agents - households, firms producing intermediate and final products, regional and federal governments, and the Central Bank. Social capital of the region is introduced into the model as a factor influencing the volume of output, depending on social expenditures (including health care costs) and expenditures on education and science in the region. Using the impulse response functions, results were obtained regarding the effect of one-step positive external and internal temporary shocks on some regional variables of the model under study (total consumption, investment, output, real wages, inflation, etc.). It is proved that fiscal regional policy is more effective when regional expenditures depend on debt obligations. With the assumption of imperfect labor mobility, the role of shocks of effective tax rates on the volatility of endogenous regional variables is reduced. The results obtained can be used to develop effective counter-cyclical regional policies. It is concluded that when developing an effective countercyclical regional policy, one should take into account the results obtained in this article on the impact of external and internal shocks on regional indicators.
Keywords
region; dynamic stochastic models; supply and demand shocks; social capital; impulse response function.
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About Authors
Serkov Leonid Aleksandrovich – Candidate of Physic and Mathematic Sciences, Senior Researcher, Institute of Economics, The Ural Branch of Russian Academy of Sciences, Ekaterinburg, Russia (620014, Ekaterinburg, Moskovskaya street, 29); e-mail: dsge2012@mail.ru.
For citation
Serkov L.A. Analysis of the Effect of Structural Shocks on the Endogenic Variables of a Compact Regional Dynamic Model. Bulletin of Ural <st1:place w:st="on"><st1:placename w:st="on">Federal</st1:placename> <st1:placetype w:st="on">University</st1:placetype></st1:place>. Series Economics and Management, 2018, Vol. 17, No. 3, 445-470. DOI: 10.15826/vestnik.2018.17.3.020.
Article info
Received February 27, 2018; Accepted March 22, 2018.
DOI: http://dx.doi.org/10.15826/vestnik.2018.17.3.020
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