Structural analysis of income and risk dynamics in models of economic growth

Oleg S. Sukharev; Oleg S. Sukharev

doi:10.3934/QFE.2020001

Quantitative Finance and Economics

2020, Volume 4, Issue 1: 1-18. doi: 10.3934/QFE.2020001

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Research article

Structural analysis of income and risk dynamics in models of economic growth

Oleg S. Sukharev ^,

Institute of Economics of the Russian Academy of Sciences; 32, Nakhimovsky prospekt, Moscow, 117218, Russian Federation

Received: 27 November 2019 Accepted: 14 January 2020 Published: 15 January 2020
JEL Codes: O4, L16, E25, G32

The purpose of the research is to carry out the structural analysis of income and risk dynamics when considering the problem of economic growth, to obtain and apply the structural formula to assess the contribution of GDP elements to growth rate. The methodological basis of the research consists of the theory of economic growth and structural analysis, optimization methods and computer simulation (algorithmization) models of maximizing income and minimizing the total risk of N objects of the economic system. The implementation of the two stages of the research allowed us to establish that for the Russian economy the main contribution to the growth rate in the period 2003–2018 was made by gross consumption, but not by investment spending. The result of computer simulation of optimization models—maximizing income and minimizing risk is that the solution to the problem of structural choice can be an assessment of the dynamics of income and risk at a characteristic point in which different resource allocation structures give the same combination of income and risk. However, the growth rate of income and risk in the characteristic point will certainly be different, and the most acceptable option is to choose the structure that gives a positive growth rate of income and a negative growth rate of risk. This circumstance makes a significant addition to the developed macroeconomic and structural policy measures, which should be oriented not only to some static targets, but also to the impact on the dynamics of the relevant aggregated parameters—income and risk.
- economic growth,
- structural dynamics,
- structural analysis,
- optimization models,
- structural formula
Citation: Oleg S. Sukharev. Structural analysis of income and risk dynamics in models of economic growth[J]. Quantitative Finance and Economics, 2020, 4(1): 1-18. doi: 10.3934/QFE.2020001

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Abstract

The purpose of the research is to carry out the structural analysis of income and risk dynamics when considering the problem of economic growth, to obtain and apply the structural formula to assess the contribution of GDP elements to growth rate. The methodological basis of the research consists of the theory of economic growth and structural analysis, optimization methods and computer simulation (algorithmization) models of maximizing income and minimizing the total risk of N objects of the economic system. The implementation of the two stages of the research allowed us to establish that for the Russian economy the main contribution to the growth rate in the period 2003–2018 was made by gross consumption, but not by investment spending. The result of computer simulation of optimization models—maximizing income and minimizing risk is that the solution to the problem of structural choice can be an assessment of the dynamics of income and risk at a characteristic point in which different resource allocation structures give the same combination of income and risk. However, the growth rate of income and risk in the characteristic point will certainly be different, and the most acceptable option is to choose the structure that gives a positive growth rate of income and a negative growth rate of risk. This circumstance makes a significant addition to the developed macroeconomic and structural policy measures, which should be oriented not only to some static targets, but also to the impact on the dynamics of the relevant aggregated parameters—income and risk.

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