2020 (17), №1

Main Features of the Theory of Structural Dynamics and their Application in Macroeconomic Analysis

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Sukharev, O. S. (2020). Main Features of the Theory of Structural Dynamics and their Application in Macroeconomic Analysis. Zhurnal Economicheskoj Teorii [Russian Journal of Economic Theory], 17 (1), 33-52

Abstract:

The aim of the study is to formulate the basic principles of the theory of structural dynamics that describe the changing relationships between elements of the macroeconomic system. The subject of the research is to find out the connection between change in the structure and economic dynamics of the GDP and the impact on economic growth of sustainability of dynamics of individual GDP components. The result is to identify different models of economic growth by the size of the contribution of GDP component or sector to its rate. In addition, the ”structural formula” of GDP analysis is obtained. The linkage models of the rate, share, and contribution of the element to the growth rate are given. Using the two-sector model of the economy (manufacturing and the transaction-raw materials sector) as an example, we obtain a condition for the relationship between structural parameters and growth rate, and also determine the change in the contribution to the growth rate to ensure its stability with respect to the standard deviation of the contribution of the GDP element. The application of the formulated provisions of the theory of structural dynamics at the macroeconomic level of analysis for the Russian economy make it possible to establish that the dominance of the transaction sector in structural dynamics is highly volatile in its contribution to the growth rate relative to other sectors. The determining contribution to the growth rate of gross consumption is more stable relative to the contribution of the transaction sector and, in addition, the spread is not much different from other components of GDP, excluding government spending. Macroeconomic analysis, taking into account the structural dynamics of the elements, allows to make corrections in the activities of economic policy. In particular, the positive relationship between the share of the manufacturing sector in GDP and its growth rate, as well as its contribution to the growth rate, confirms the feasibility of structural changes in the direction of expansion of the manufacturing sectors.

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Oleg Sergeevich Sukharev — Doctor of Economics, Professor, Institute of Economics of the Russian Academy of Sciences (Moscow, Russian Federation; e-mail: o_sukharev@list.ru).

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