Idziev G.I.Institute of Social and Economic Research of the Dagestan Scientific Center, Russian Academy of Sciences, Makhachkala, Republic of Dagestan, Russian Federation textima@mail.ru
Importance The article overviews the multiplicative effect, objective reasons and an attention to it in modeling parameters and vectors of the region's economic development. Based on that, I test an algorithm for forming regional multipliers and identify the way productive and investment effects influence a growth in GDP, illustrating the specific region. Objectives The research evaluates macroeconomic implications of economic policies in the region through the way productive and investment effects influence the growth in Gross Regional Product. Methods The research uses methods of assessing synergistic and multiplicative effects that are based on the Keynes theory stating that the main growth in GNP results from innovation in productive and technological sectors. Results Notwithstanding the ability of the region's economy to recover and regulate itself, it needs such amounts of investment doping so to generate the investment effect overlapping the negative growth in reproduction capitalization. However, analyzing the findings, the following mismatch can be seen. The simple investment multiplier grows, while the simple productive multiplier drops, evidencing the ineffective use of the investment potential and, incidentally, ineffective economic policies in the region. Conclusions and Relevance If regional multipliers are assessed, being applied to optimize the sectoral structure of the region's economy, they will allow considering the extent to which macroeconomic regulation and administration influence the formation of structural characteristics of the region's economic development, as well as help to eliminate arbitrary investment, which may cause disparities in the structure of the region's economy. The findings can be used to model parameters and vectors of the region's economic development, determine the significance of certain large-scale investment projects.
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