Abstract
The article deals with the problem of substantiation of the emergent economies development regulatory measures (fiscal and / or monetary), using the evolutionary modelling methods. For this purpose, the mathematical model was constructed that simulates the co-evolution process of the advanced and developing countries, linked by global value chains. In this model, each country is characterized by its original structure of economic entities, defined by the ratio of the egoistic enterprises (predisposed to conservative behaviour) to the altruistic enterprises (predisposed to innovation), as well as by specific population and demographic processes. The results of the computational experiments have shown that the success of economic regulation fundamentally depends on the peculiarities of the initial state of the institutional environment. In the institutional environment with the «transparent» long behaviour and, accordingly, a long economic planning horizon, the best result in the form of average annual production growth rate of the emergent economies is provided by the cheap money policy combined with the high European taxes. A different situation is observed in more realistic short behaviour and, accordingly, short (under 5 years) economic planning horizon. In this case, any tax policy (neither low nor high taxes) together with any money (neither cheap nor expensive), to a certain extent loses its significance, as the initially backward innovative system does not allow to quickly get good results, and the long-term benefits of the potential economic growth are not taken into consideration. However, low taxes and cheap money are important as they create better conditions for survival of the altruistic enterprises, facilitating their investment activities, which can multiply increase their technical performance and economic efficiency. Still, in the context of the evolutionary economics and following the conducted computational experiments, the fiscal policy in terms of emerging markets retains its regulatory capacity, and therefore requires further reforms in the context of the «new reality» based on the global value chains.
Highlights
To overcome the consequences of the global financial and economic crisis the world’s leading countries are widely using the monetary policy, as the fiscal policy receded into the background and was largely limited to the procyclical budget austerity measures
The purpose of this study is to prove what measures of national economies development regulation — fiscal and/or monetary and in what combination — are better to use in order to change the current unfavourable situation for many developing countries involved in Global Value Chains (GVCs) as auxiliary links
The results of the optimization calculations on the assumption of «long behaviour» showed that the policy, promoting the economical growth best (Fig. 10), is the cheap money policy, which gives the economic population the best investment access to savings, and high European taxation, which provides the government with the ability to consistently build and maintain a high level of R&D expenditures, thereby contributing into accelerating the development and localization of imported technologies
Summary
To overcome the consequences of the global financial and economic crisis the world’s leading countries are widely using the monetary policy (mainly the quantitative easing), as the fiscal policy receded into the background and was largely limited to the procyclical budget austerity measures. A natural interpretation is that fiscal multipliers were substantially higher than implicitly assumed by forecasters» [4] This conclusion, even if it is a completely fair one, cannot be automatically referred to the emerging markets, including Russia, where the production potential is limited by conventional technologies, the lack of modern equipment, STEM-staff and others, and many businesses are integrated into the Global Value Chains (GVCs) as a raw materials supplier or the low processed. The purpose of this study is to prove what measures of national economies development regulation — fiscal and/or monetary and in what combination — are better to use in order to change the current unfavourable situation for many developing countries involved in GVCs as auxiliary links In this regard, it was required to solve the following tasks:.
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