An Empirical Model of the Relationship between Value Added Elements and Final Product in the Russian Economy
This is a sequel to a paper published in the previous issue of this journal (No. 1, 2008), which dealtwith a system of tables to provide a theoretical description of the transformation of primary incomes into finalconsumption and saving expenditures. On the basis of the proposed system of tables an empirical model wasbuilt, which can describe in quantitative terms the relationship between the elements of value added and endproduct in the Russian economy over the period 1995-2003. We have proposed and put into practice an algorithmfor estimating primary income parts (flows) spent on financing various end-use items. The calculatedflows are interpreted as elements of Quadrant IV of the interindustry balance (or tables of use of goods and services)in current consumer prices. We have estimated a system of dynamic equations for these shares, whichcan be used as the basis for predicting the end-use structure under given volumes of value added elements.