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The External and Internal Shocks' Impact on Macroeconomic Indicators of a Region

Author

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  • Leonid A. Serkov

    (Institute of Economics (Ural branch of RAS))

Abstract

The research aims to examine the influence of external (from the centre and other regions) and internal shocks of supply and demand on the behaviour of economic agents using a compact regional dynamic stochastic general equilibrium model. The author estimates the parameters of the model by the Bayesian method on the statistical data of the economy of the Sverdlovsk oblast. The model under inves? tigation is New Keynesian, with rational expectations of economic agents, without cash, with rigid prices and flexible wages. The model considers the following types of agents – households, firms producing intermediate and final product, regional and federal government, and the Central Bank. The distinctive feature of the model is that it introduces social factor of the region as a factor influencing the volume of output, which depends on social expenditures (including health care costs) and expenditures on educa? tion and science in the region. Through the functions of impulse response, the author explores the influ? ence of simultaneous positive external and internal temporary shocks on some regional variables of the model under study (total consumption, investment, output, real wages, inflation, etc.).

Suggested Citation

  • Leonid A. Serkov, 2018. "The External and Internal Shocks' Impact on Macroeconomic Indicators of a Region," Journal of New Economy, Ural State University of Economics, vol. 19(4), pages 45-63, August.
    • Handle: RePEc:url:izvest:v:19:y:2018:i:4:p:45-63
    DOI: 10.29141/2073-1019-2018-19-4-4
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    References listed on IDEAS

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    More about this item

    Keywords

    region; dynamic stochastic models; supply and demand shocks; social factor; impulse response function.Journal: Journal of New Economy;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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