Olga Demidova (Higher School of Economics, Russia): Spatial aspects of growth across Russian regions

Olga Demidova (Higher School of Economics, Russia): Spatial aspects of growth across Russian regions

Abstract

The modeling of economic growth of countries and regions has attracted various researchers for several decades. In this research, we will focus on the application of spatial econometric methods to growth models. The basic idea behind the economic growth models with spatial effects lies in the fact that the region's economic growth depends not only on its socio-economic, geographical and other characteristics, but also on the growth of other regions, especially the neighboring ones. If one of the regions begins to grow, it can have no effect on the growth of other regions (neutral mechanism), stimulate the growth of its neighbors (the mechanism of co-operation) or slow their growth, "pulling" their resources (competition mechanism). The answer to the question of which mechanism occurs and to what extent, has implications for the choice of a balanced economic policy and evaluating the effectiveness of investments in regional development. In traditional spatial-econometric models in order to simplify the calculations exists quite a strong assumption that all regions have the only one of these mechanisms in effect, and the intensity of external influence does not vary between regions. This assumption may be justified for small, relatively homogeneous regions of the European countries. However, for such a large and heterogeneous country like Russia, it appears too strong.  This study will attempt to weaken this assumption using 1) spatial autoregressive model for the case when considered regions are split into two different groups (eastern and western), which have a mutual influence on each other, 2) sensitivity parameter governing regional exposure to externalities (we assume this parameter to be a linear function of region-level observables, like area, population density or urbanization rate), 3) different levels of regional aggregation, 4) Bayesian approach.  These models suit Russian realities more.

BOFIT seminars are held on Tuesdays at 10.30–11.30 in Rauhankatu 19, 3rd floor big meeting room (unless indicated otherwise). Seminars are held in English.

BOFIT seminars are open to all economists interested in the subject areas covered. Please register in advance at bofit(at)bof.fi or by phone +358 10 831 2268 by noon of the preceding day. Visitors will be escorted from Rauhankatu 19 B (Kirjasto/Library) entrance to the seminar room 10 minutes before the seminar.