Dynamic input–output balance as a tool for structural policy analysis

This article extends the array of tools available for the analysis and advancement of structural policies using dynamic inter-sectoral balance, expressed in the form of a system of ordinary differential equations. This development became achievable following the publication of the authors’ methods for digitizing and calibrating such a structural model, thereby transforming it from a set of “purely theoretical constructs” into a set of computational and pragmatically valuable models. Formally, the digitization process for the model involves the introduction and computation of the eigen (intra-industry) and mutual (inter-industry) inertia matrices, the elements of which are time-dependent. These matrices substitute the conventional incremental capital intensity matrix within the model. It is worth noting that, unlike other scientific summaries, the matrix of incremental capital intensity is nowhere to be found in global statistics. No statistical institute worldwide develops or publishes it for any economy. The second factor that enhances the practical utility of the model lies in the utilization of the matrix of financial flow coefficients for its calibration. The computations conducted and presented here lead to the conclusion that the model is proficient in providing robust forecasts of gross output in current and comparable prices within the timeframe covered by Rosstat’s basic “input–output” tables. In its current format, the model holds potential as a valuable tool for scrutinizing structural changes within the domestic economy and for comparing Russia’s economic trends with those of other developed and developing nations. Digitizing it for use at the regional level would enable similar analyses on a mesolevel scale.