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Modelling of the åconomic growth factors: The case of the Ural regions and the Russian Federation

Author

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  • Daria S. Benz

    (Chelyabinsk State University, Chelyabinsk, Russia)

Abstract

Current pandemic-induced downturn has made the problem of economic growth even more acute for the Ural regions of Russia. The national economy is stagnating and trans mits the same processes to the regional economies. The paper aims to identify the economic growth factors for eight Ural regions and for the national economy as a whole. The author mod els the functions of economic growth for regions that are part of both the Ural Federal District and the Ural macroregion, thereby consciously expanding the study for comparative analysis. Methodologically, the paper relies on the theory of economic growth and theory of produc tion (works of C. W. Cobb, P. H. Douglas, R. M. Solow). The author uses econometric tools and builds regressions for eight regions and the national economy, where the outcome variable is the growth rate of gross regional product. The independent variables include the growth rates of the following indicators: industrial production, employment, investments in fixed assets, cost of fixed assets, average per capita incomes, costs of technological innovations. The source of statistical information is Rosstat data covering the period 1995–2018. Based on the constructed functions, the researcher draws a number of conclusions. For the majority of the Ural regions, as well as for the Russian economy, the deciding and the most elastic factor is the growth rate of industrial production. Results among regions vary, but in total, the growth rate of average per capita incomes is the second most important factor. The increase in employment affects greatly the economic growth, especially in those regions that have seen a drastic decline in the labour force over the past decades. The costs of technological innovation do not demonstrate high elasticity. The author suggests that the reason is that their amount is extremely small. Even high growth rates of costs of technological innovation do not produce a visible result, since their level remains catastrophically low. The results of the study can be used in the regional and national socioeconomic development strategies, as well as serve a basis for further economic studies.

Suggested Citation

  • Daria S. Benz, 2020. "Modelling of the åconomic growth factors: The case of the Ural regions and the Russian Federation," Journal of New Economy, Ural State University of Economics, vol. 21(3), pages 112-131, October.
    • Handle: RePEc:url:izvest:v:21:y:2020:i:3:p:112-131
    DOI: 10.29141/2658-5081-2020-21-3-6
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    References listed on IDEAS

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    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Kasim Yusupov & Iuliia Toktamysheva & Asat Yangirov & Rustem Akhunov, 2019. "Economic Growth Strategy Based on the Dynamics of Gross Domestic Product," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(1), pages 151-163.
    4. Yakova Silin & Yevgeniy Animitsa & Natalya Novikova, 2017. "Regional Aspects of New Industrialization," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(3), pages 684-696.
    5. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Keywords

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    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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