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Modeling economic growth of different countries by means of production functions on the basis of comparative analysis of dynamics of interaction of social groups

Matveenko V.D., Nicholas Olenev () and Shatrov A.V.
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Matveenko V.D.: National Research University Higher School of Economics at St. Petersburg
Shatrov A.V.: Vyatka State University

Authors registered in the RePEc Author Service: Владимир Матвеенко

Вестник Пермского университета. Серия: Экономика, 2015, issue 2 (25), 42-50

Abstract: Basing on the theory of endogenous growth, we provide a possible explanation of differences in the development of national economies of the world and their reaction to the global economic crises. Earlier an approach to modeling of the choice of technologies in various countries was proposed (Matveenko, 2007, 2010). Technological progress is modeled as a change of parameter a of the Cobb-Douglas production function Y = AK aL~ a or of the CES production function Y = A(aK p + (1 - a) L p ) 17 p. The parameter a has both technological and institutional meaning for the economy, in particular, for the Cobb-Douglas function it is the capital share. Recently, a big difference in capital share in different countries and in different times has been found empirically by several authors. The choice of the parameter naturally depends on the interests of the social groups: the workers and the capital owners; each group agrees to a change of the parameter a if it leads to income increase for this group. Thus, it is possible to identify the areas of coincidence and non-coincidence of interests of the social groups on the plane a-k, where k is the capital-to-labor ratio. Using the UNSTATS statistical data, we build the graphs of parametric dependencies a-k for the economies of the USA, Japan, Russia, China and Iran for the period of 2000 - 2010. The graphs clearly identify the sub-period of the crises by changes in the area of coincidence/non-coincidence of interests. A specific behavior of the integral characteristic for the area of non-coincidence of interests of the social groups in Russia and China is noted, which differs radically from the situation in the USA.

Date: 2015
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