Investments in the infrastructure of Siberia and the Far East. Macroeconomic analysis based on general equilibrium model

A. Shulgin and S. Shulgin
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A. Shulgin: Volga-Vyatka Main Branch of the Bank of Russia, Nizhnii Novgorod, Russia
S. Shulgin: Russian Presidential Academy of National Economy and Public Administration (RANEPA), Moscow, Russia
Authors registered in the RePEc Author Service: Andrei Shulgin

Journal of the New Economic Association, 2021, vol. 49, issue 1, 81-114

Abstract: We have developed a general equilibrium model that belongs to the class of real business cycle models of a small open economy exporting natural resources, which allows us to take into account the impact of investments in infrastructure projects. The model was calibrated to perform deterministic simulation of the investments project of the new railway construction and associated enterprises for the extraction and primary processing of natural resources in Siberia and the Far East. We use the information available before 2018. By 2050, the contribution of the infrastructure project, with a total size of 2.3% of GDP, to GDP growth is estimated at 4.0%, and the largest contribution of 2.7% of GDP is made by the growth of natural resource exports by 31.6 billion US dollars. 29.4 billion US dollars import increase and 7.2% consumption increase are due to the 5.4% of real ruble appreciation by 2050. The long-term equivalent consumption variation of the project is estimated as 8.36% a year. The project leads to an exacerbation of the Dutch disease of the Russian economy: the country's specialization in the production and export of natural resources increases, imports increase, exports of other goods decrease, consumption increases, currency appreciates, and labor supply decreases.

Keywords: investments in infrastructure; infrastructural project; general equilibrium; Dutch disease; Siberia and Far East (search for similar items in EconPapers)
JEL-codes: E37 E65 O11 O22 O53 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:nea:journl:y:2021:i:49:p:81-114

DOI: 10.31737/2221-2264-2021-49-1-3

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