The impact of the structural factor on economic growth, Russian case // Uzyakov

Rafael Uzyakov, IEF RAS



Original link: https://ecfor.ru/publication/a-multisectoral-macroeconometric-model-of-uk/

27th Inforum Conference.

The conference & materials: https://ecfor.ru/27th-inforum-world-conference/

Playlist with the other videos from the conference: https://www.youtube.com/playlist?list=PLJBJFs8UgQgpmWWFzqw87jdwOBQXQmLfu
Inforum’s site: http://www.inforum.umd.edu/

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Inforum, or Interindustry Forecasting at the University of Maryland, was founded nearly 50 years ago by Dr. Clopper Almon, now Professor Emeritus of the University. It is dedicated to improving business planning, government policy analysis, and the general understanding of the economic environment.

The host side was the Institute of Economic Forecasting of the Russian Academy of Sciences. IEF RAS specializes in fundamental, applied and exploratory scientific research in the field of analysis and forecasting of the socio-economic prospects of Russia and its regions, and the development of recommendations and proposals with a goal to improve the quality of economic policy in Russia. The site is https://ecfor.ru.


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Notes:

1.
The technological level and structure of the economy are the most important characteristics of the economic development. Economic efficiency and the quality of economic growth are significantly dependent on technological and structural changes. The prospects for the Russian economy are increasingly associated with factors of structural and technological development.

2.
The most popular measure of structural changes in economy is the change in the sectors share in the studied aggregate (for example gross output or GDP).

3.
It is important to note that this is not the only metric of structure and structural changes in the economy. The meaning of this metric is to show the changes and the rate of components changing in the aggregate (in our case, we talk about gross output). But what is the contribution of all these changes to economic growth?

4.
As a rule, the production increase is provided with accelerated growth in a number of sectors, which is faster than the growth of gross output. Similarly, the decline in production is accompanied by an accelerated decline in some part of the economy. Exactly this production changes determine the final result (the aggregate dynamics). The accelerated growth in a sector, which is faster than the growth of gross output, is expressed in these sector share increasing in the total gross output amount.

These growth outrunning the general dynamics or accelerated decline in the production of various industries determine the final result (the overall dynamics of the aggregate).


5-й слайд

S^((+)) = ∑_(i=1)^n▒〖∆〖〖sh〗_i〗^((+)) 〗/ ((X^t/X^(t-1))-1)

S^((+)) – structural factor share in production growth
∆〖〖sh〗_i〗^((+)) – positive absolute changes of the i-sector share in the total gross output amount, i – the number of sector with growth, faster than the growth of gross output,
∆〖 sh〗_i = 〖〖 sh〗_i〗^t-〖 〖sh〗_i〗^(t-1)
X – the gross output

We propose to calculate the contribution of the structural factor to economic growth using this formula. It’s important that we should use the continuous period of economic growth or decline for calculation equality (calculation harmonization).

6.
Оn this graph you can see the estimates of the structural factor contribution to economic growth (during the growth period). The blue line shows us the contribution of the others factors.

7.
S^((-)) = ∑_(i=1)^n▒〖∆〖〖sh〗_i〗^((-)) 〗/ ((X^t/X^(t-1))-1)

S^((-)) – structural factor share in production decline
∆〖〖sh〗_i〗^((-)) – negative absolute changes of the i-sector share in the total gross output, i – the number of sector with decline, faster than the gross output decline.
∆〖 sh〗_i = 〖〖 sh〗_i〗^t-〖 〖sh〗_i〗^(t-1)
X – the gross output

This formula is the same one, but we used it for the period of economic decreasing.

8.
These graph shows us the contribution of the structural factor to economic decline, during the economic decline period.

9.

On these graph you can see our estimates of the structural factor contribution to economic growth on the whole period under review together with the gross output dynamic.

As we can see the influence of the structural factor become stronger before and after radical economic changes when the trend of economic dynamic change.


Conclusions

We managed to get the easily defined estimates the structural factor influence on economic growth – for the period of economic growth and in period of decline.

The influence of the structural factor become stronger before and after radical economic changes when the trend of economic dynamic change.