Interdependence of Macroeconomic Indicators and Inequality in Kazakhstan and its Main Trading Partners

For the current stage of development of the world economy, a high degree of interdependence of macroeconomic indicators across countries is characterized. Business cycles pulse transmission can occur through many channels. They can occur as a result of observed shocks of global factors, such as the world price of oil, food products, and unobservable factors, such as the spread of new technologies. In the report the aim is to reveal the relationship of macroeconomic indicators of Kazakhstan and its main trading partners on the basis of a global vector autoregression model. The model includes 12 countries: Kazakhstan, China, Russia, Austria, Belgium, Finland, France, Germany, Italy, Netherlands, Spain and the United States. For its construction quarterly data for 1995–2013 years were used. Shocks of variables such as real GDP, inflation, short-term and long-term nominal interest rates, real exchange rate, Gini index, and responses to them in all countries are considered. Also, world oil price shocks has a strong influence. The constructed model makes it possible to assess the impact of the various shocks that arise in partner countries on macroeconomic performance in a small economy, including socio-economic indicators, such as income inequality. In particular, it became clear that a positive shock in real GDP in each country reduces inequality in the country and in other countries. Positive shocks to Russia Gini Index has also increased income inequality in Kazakhstan.