Quarterly Projection Model for the Siberian Macroregion

Russia's regions are characterised by strong heterogeneity of economic conditions, and, accordingly, the regions' reaction to macroeconomic shocks throughout the country, including shocks of the single monetary policy, may be heterogeneous. This paper is devoted to the development of a tool to analyse the economy of the Siberian macroregion, a semistructural model consisting of three blocks: Siberia, the rest of Russia, and the outside world. The main difference between this model and an all-Russian model lies in the different Phillips and aggregate demand curves for Siberia and the rest of Russia. The model takes into account the specifics of Siberia, including the small contribution of the region to the main macroeconomic indicators for Russia, the high share of extractive industries in output, and others. It is shown that the model describes ongoing processes in accordance with economic intuition, which allows it to be used for medium-term forecasting and analysis.