Economic Dynamics of Russia: Approach Based on the Solow-Swan Model

Abstract

The article discusses the construction of a macroeconomic growth model of the Russian economy, which is a modification of the classical Solow-Swan model. Our model comprises four discrete-time econometric equations. Its two key features are the relationship between capital services and GDP growth rate and phenomenological dependence of capital services on the growth rate of the capital stock. Labor dynamics are described by the Beverton-Holt model. The data used are from the Penn World Table version 9.1 (up to 2017). Based on the model, a forecast of the development of the Russian economy up to 2025 is constructed which was found rather realistic. The constructed model allowed to reach several general conclusions concerning the growth path of the Russian economy, including the limited role of large infrastructure projects as growth “drivers”, while the all-important role of human capital was confirmed.