IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/75597.html

Modification of the GE-IO model of the Russian economy with dynamic optimization of macroeconomic policy

Author

Listed:
  • Gilmundinov, Vadim
  • Bozo, Natalia
  • Melnikov, Vladimir
  • Petrov, Sergei

Abstract

The paper describes recent results connected with extension of the general equilibrium input-output model of Russia with aggregated markets (Gilmundinov et al, 2015). Consideration of economic policy’s influence on a variety of macroeconomic and structural policy goals is an aim of this extension. For this purpose we add into GE-IO model sectoral fixed capital investment’s sub-models and sub-model of dynamic optimization of economic policy. Sectoral sub-models of fixed capital investments are based on the assessments of sectoral production functions with variable degree of capacity use. Sub-model of dynamic optimization of economic policy is based on extension of basic approaches suggested by H. Theil (1954, 1964), J. Tinbergen (1952) and R. Mundell (1962) with dynamic social losses function and accounting of influence of economic policy on sectoral structure of national economy. The suggested modification allows to simulate impact of different variants of economic policy on national economy, aggregated markets and main sectors. That is very helpful for estimation of consequences of various internal and external shocks and development of optimal economic policy and gives more advantages in comparison with standard DSGE or CGE models. The preliminary results of simulations based on suggested model for the Russian economy show considerable dependence of the Russian economy dynamic and structure on economic policy. Optimal economic policy should be hybrid with combining structural policy with sectoral credit policy of Central Bank. According to the basic scenario of simulation with neutral economic policy the Russian GDP in constant prices will decline at 1.8% in 2016 in comparison to 2015 and almost have no changes in 2017 in comparison to 2016. Stimulating economic policy allows to raise growth rates of the Russian economy at 2-3%.

Suggested Citation

  • Gilmundinov, Vadim & Bozo, Natalia & Melnikov, Vladimir & Petrov, Sergei, 2016. "Modification of the GE-IO model of the Russian economy with dynamic optimization of macroeconomic policy," MPRA Paper 75597, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:75597
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/75597/3/MPRA_paper_75597.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert A. Mundell, 1960. "The Monetary Dynamics of International Adjustment under Fixed and Flexible Exchange Rates," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 74(2), pages 227-257.
    2. Robert A. Mundell, 1962. "The Appropriate Use of Monetary and Fiscal Policy for Internal and External Stability," IMF Staff Papers, Palgrave Macmillan, vol. 9(1), pages 70-79, March.
    3. Jordi Galí, 2008. "Introduction to Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework," Introductory Chapters, in: Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework, Princeton University Press.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nobel Prize Committee, 1998. "Amartya Sen: Background Information," Nobel Prize in Economics documents 1998-1, Nobel Prize Committee.
    2. Juan Carlos de Pablo, 2004. "La Economía como proceso decisorio. Mi versión," CEMA Working Papers: Serie Documentos de Trabajo. 267, Universidad del CEMA.
    3. Obstfeld, Maurice, 1980. "Imperfect asset substitutability and monetary policy under fixed exchange rates," Journal of International Economics, Elsevier, vol. 10(2), pages 177-200, May.
    4. Russell Boyer & Warren Young, 2010. "The Fleming-Mundell Diagram," Chapters, in: Mark Blaug & Peter Lloyd (ed.), Famous Figures and Diagrams in Economics, chapter 48, Edward Elgar Publishing.
    5. Fakhri J. Hasanov & Moayad H. Al Rasasi & Salah S. Alsayaary & Ziyadh Alfawzan, 2022. "Money demand under a fixed exchange rate regime: the case of Saudi Arabia," Journal of Applied Economics, Taylor & Francis Journals, vol. 25(1), pages 385-411, December.
    6. Howard R. Vane & Chris Mulhearn, 2006. "Interview with Robert A. Mundell," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 89-110, Fall.
    7. Jimmy W. Wheeler, 1972. "Domestic Policy and International Exchange Rate Movements, A Review," The American Economist, Sage Publications, vol. 16(2), pages 123-128, October.
    8. Robert Alexander Mundell, 2000. "Le vingtième siècle," Revue de l'OFCE, Programme National Persée, vol. 74(1), pages 7-31.
    9. Nobel Prize Committee, 1999. "Robert A. Mundell: Background Information," Nobel Prize in Economics documents 1999-1, Nobel Prize Committee.
    10. Robert Prasch, 2001. "The Economic Contributions of Robert A. Mundell," Review of Political Economy, Taylor & Francis Journals, vol. 13(1), pages 41-58.
    11. Gilmundinov V. M. & Melnikov V. V. & Petrov S. P., 2016. "Optimization of the Russian Macroeconomic Policy for 2016–2020," World of economics and management / Vestnik NSU. Series: Social and Economics Sciences, Socionet, vol. 16(4), pages 5-19.
    12. Gabriel Caldas Montes & Irineu da Silva Rodrigues Júnior & Júlio Cesar Albuquerque Bastos & Linican Monteiro Batista, 2024. "Effects of monetary policy credibility and the open economy trilemma on monetary policy efficiency," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 1236-1258, April.
    13. Adnan Haider Bukhari & Safdar Ullah Khan, 2008. "A Small Open Economy DSGE Model for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 963-1008.
    14. Okano Eiji & Masataka Eguchi, 2019. "Optimal Monetary and Fiscal Policy Rules, Welfare Gains and Exogenous Shocks in an Economy with Default Risk," BCAM Working Papers 1902, Birkbeck Centre for Applied Macroeconomics.
    15. Mellár, Tamás, 2010. "Válaszút előtt a makroökonómia? [Does macroeconomics face a dilemma?]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 591-611.
    16. Mădălin Viziniuc, 2017. "Potential Gains from Cooperation Between Monetary and Macroprudential Policies: The Case of an Emerging Economy," Eastern European Economics, Taylor & Francis Journals, vol. 55(5), pages 420-452, September.
    17. repec:spo:wpmain:info:hdl:2441/1lu2rbsv0n8pkqid81q0tfof3f is not listed on IDEAS
    18. George S. Tavlas, 2015. "In Old Chicago: Simons, Friedman, and the Development of Monetary‐Policy Rules," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 47(1), pages 99-121, February.
    19. Brown, Malcolm C. & Crampton, Peter, 1997. "New Zealand policy strategies concerning the funding of general practitioner care," Health Policy, Elsevier, vol. 41(2), pages 87-104, August.
    20. Ester Faia & Wolfgang Lechthaler & Christian Merkl, 2014. "Labor Selection, Turnover Costs, and Optimal Monetary Policy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 46(1), pages 115-144, February.
    21. Aliya Algozhina, 2012. "Monetary and Fiscal Policy Interactions in an Emerging Open Economy: a Non-Ricardian DSGE Approach," FIW Working Paper series 094, FIW, revised Dec 2012.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:75597. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.