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Investments in the infrastructure of Siberia and the Far East. Macroeconomic analysis based on general equilibrium model

Author

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  • Shulgin, A.

    (Volga-Vyatka Main Branch of the Bank of Russia, Nizhnii Novgorod, Russia)

  • Shulgin, S.

    (Russian Presidential Academy of National Economy and Public Administration (RANEPA), Moscow, Russia)

Abstract

We have developed a general equilibrium model that belongs to the class of real business cycle models of a small open economy exporting natural resources, which allows us to take into account the impact of investments in infrastructure projects. The model was calibrated to perform deterministic simulation of the investments project of the new railway construction and associated enterprises for the extraction and primary processing of natural resources in Siberia and the Far East. We use the information available before 2018. By 2050, the contribution of the infrastructure project, with a total size of 2.3% of GDP, to GDP growth is estimated at 4.0%, and the largest contribution of 2.7% of GDP is made by the growth of natural resource exports by 31.6 billion US dollars. 29.4 billion US dollars import increase and 7.2% consumption increase are due to the 5.4% of real ruble appreciation by 2050. The long-term equivalent consumption variation of the project is estimated as 8.36% a year. The project leads to an exacerbation of the Dutch disease of the Russian economy: the country's specialization in the production and export of natural resources increases, imports increase, exports of other goods decrease, consumption increases, currency appreciates, and labor supply decreases.

Suggested Citation

  • Shulgin, A. & Shulgin, S., 2021. "Investments in the infrastructure of Siberia and the Far East. Macroeconomic analysis based on general equilibrium model," Journal of the New Economic Association, New Economic Association, vol. 49(1), pages 81-114.
    • Handle: RePEc:nea:journl:y:2021:i:49:p:81-114
    DOI: 10.31737/2221-2264-2021-49-1-3
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    Cited by:

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    2. Polbin, Andrey & Sinelnikov-Murylev, Sergey, 2024. "Developing and impulse response matching estimation of the DSGE model for the Russian economy," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 73, pages 5-34.
    3. Elizaveta V. Martyanova & Andrey V. Polbin, 2024. "Scenario Assessment of Macroeconomic Effects of Progressive Taxation in Russia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 8-30, February.

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    More about this item

    Keywords

    investments in infrastructure; infrastructural project; general equilibrium; Dutch disease; Siberia and Far East;
    All these keywords.

    JEL classification:

    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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