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Dynamic Multipliers in Economics: Results and Interpretation of Calculations on the Example of Russia

Author

Listed:
  • A. O. Baranov

    (Institute of Economics and Industrial Engineering, Russian Academy of Sciences, Siberian Branch)

  • A. V. Goreev

    (Institute of Economics and Industrial Engineering, Russian Academy of Sciences, Siberian Branch)

Abstract

The article presents the results of the calculation of dynamic multipliers produced by an increase in public spending in various industries of the Russian economy. The calculations are based on a dynamic input–output model for 72 industries with distributed construction lags. Dynamic multipliers are defined as the ratio of the increase in the gross output of the national economy in the forecast version with an increase in investment or noninvestment spending relative to its value in the version without such an increase to the increase in the corresponding costs. The calculations are performed for the period 2023–2032. It is shown that for investment spending the dynamic multipliers are positive and 2.5–3 times higher than the corresponding static ones for all industries. For noninvestment and total spending, the multipliers are positive for most industries and negative for some. It is also shown that dynamic investment multipliers increase every year, but the growth rate of that increase slows down. The structure of dynamic multiplier effects is considered with a breakdown by sections of the economy corresponding to industrial consumption and to household final consumption. Calculation of dynamic multipliers enables assessment of not only short-term effects of investments, but also accumulated effects of deployment of fixed assets over several years.

Suggested Citation

  • A. O. Baranov & A. V. Goreev, 2024. "Dynamic Multipliers in Economics: Results and Interpretation of Calculations on the Example of Russia," Studies on Russian Economic Development, Springer, vol. 35(4), pages 497-507, August.
    • Handle: RePEc:spr:sorede:v:35:y:2024:i:4:d:10.1134_s1075700724700059
    DOI: 10.1134/S1075700724700059
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    References listed on IDEAS

    as
    1. A. V. Zubarev & K. V. Nesterova, 2022. "Fiscal consolidation during the pandemic," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 7.
    2. Pichler, Anton & Pangallo, Marco & del Rio-Chanona, R. Maria & Lafond, François & Farmer, J. Doyne, 2022. "Forecasting the propagation of pandemic shocks with a dynamic input-output model," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    3. O. V. Buklemishev, 2023. "“Structural Transformation” of the Russian Economy and Economic Policy," Studies on Russian Economic Development, Springer, vol. 34(4), pages 456-463, August.
    4. D. V. Skrypnik, 2022. "The VAT rate hike, government spending, economic growth and sectoral effects: CGE analysis," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 7.
    5. Argyrios D. Kolokontes, 2021. "Reposition of Forward-to-Backward Input-Output Analysis," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 68(2), pages 195-232, June.
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