The Evaluation of Production Growth and Inflation under Stimulating the Consumer Demand

This article informs about the results of a model experiment conducted at the inter-industry level. The experiment was intended to quantify the growth of gross domestic product resulted from the possible implementation of the Government's financial support program for the poorest people. The possible increase in the inflation rate was taken into account and assessed. The experiment on the model was constructed on the basis of reporting inter-industry balances of 2003, 2014 and 2015, including the division of used products into imported and domestic. The simulated process implied such forms of financial support for poor citizens, which initially lead to an increase in demand mainly (or even exclusively) for domestic products. And then, as the increased demand increases the volume of domestic production and, accordingly, increases the incomes of all segments of the population, the demand for imported products also begins to increase. At the same time as consumption is increasing, there is also an increase in investment due to the increase in corporate revenues and the persistence of all established inter-industry links and basic national economic proportions. Model calculations that reproduce the described process were conducted in several scenarios, involving variations in both the structure of sponsored consumption and the reaction of consumers and producers to the appearance of additional income. The most realistic and preferable (from the economic point of view) variants were considered. The main result of the work done can be considered the following results. First, the experiments found that the greatest economic impact occurs, when financing the additional demand stimulates the growth of domestic production, primarily in the consumer goods (light) and food industries. The most important outcome is that: it is possible to use such methods of stimulating consumer demand. And most importantly, it is possible to use such methods of stimulating consumer demand, in which the emerging growth of gross domestic product significantly exceeds the costs incurred by the state.