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Estimation of the Dependence of the Investment Multiplier on the Structure of the Regional Economy

Author

Listed:
  • Sergey Sylvestrov

    (Financial University under the Government of the Russian Federation)

  • Vladimir Bauer

    (Center for Strategic Forecasting and Planning of the Federal State budget institution of higher education Financial University under the Government of the Russian Federation)

  • Vladimir Eremin

    (Department of Economics and Management Disciplines of the branch of the Russian State University for the Humanities in the city of Domodedovo, Moscow Region)

Abstract

The complicated conditions of the modern economy reduce the effectiveness of traditional instruments for economic regulation. The debt burden of the regions is growing, forcing them to cut spending on medicine and education, thereby, reducing investment in human capital. In these conditions, new economic tools for regional management are neecessary. We propose the investment multiplier as such an instrument. The novelty of the research is the investigation of the impact of the investment multiplier on the regional economy as well as in developing an information model for analyzing the regional investment multiplier. We also have developed a model that allows to assess the relationship between the value of the investment multiplier and the structure of the regional economy. We consider the main directions of the analysis of the regional investment multiplier, allowing assessing its structure, dynamics and factors influencing its value. The model is based on the data of regional statistics. This model allows estimating the relationship between the value of the investment multiplier and the structure of the regional economy. We have made the assessment of this relationship for the Central and Far Eastern Federal Districts. The obtained results allowed to reveal the reserves for the economic development of these regions, as well as certain barriers on the way of this development. We have ranked the economic activities of the region by the strength of their influence on the value of the investment multiplier with a view to further managing this value. Applying the obtained results in managing the regional economy will help to avoid a significant deviation of the actual data from the planned values of the key indicators of the regional economy. Managing the value of the investment multiplier will help counteract the economic recession, initiating growth even in relatively difficult economic conditions.

Suggested Citation

  • Sergey Sylvestrov & Vladimir Bauer & Vladimir Eremin, 2018. "Estimation of the Dependence of the Investment Multiplier on the Structure of the Regional Economy," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 1463-1476.
    • Handle: RePEc:ura:ecregj:v:1:y:2018:i:4:p:1463-1476
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    Cited by:

    1. Sergey Nikolaevich Silvestrov & Sergey Alekseevich Pobyvaev & Stanislav Borisovich Reshetnikov & Dmitrii Vladimirovich Firsov, 2022. "Management of the Russian Interregional Investment Distribution Using the Autonomous Expenditure Multiplier Model," Economies, MDPI, vol. 10(2), pages 1-18, February.

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