Influence Of Foreign Trade On The Economics Of The North Caucasian Macroregion

Abstract

There are various academic assessments of the main growth forces of Russian gross domestic product, many of which show that the overall growth of production factors is of paramount importance. However, many studies analyze the relationship between foreign trade and economic growth, i.e., causes of expanding trade and economic growth. Moreover, the regional projection of economic growth, determined by exogenous factors, is an understudied research area. These issues are acute in the border regions of the North Caucasus macroregion of the Russian Federation.. We reconstructed the growth dynamics of the economy of the North Caucasian macroregion of Russia for 1995–2017 and compared the results with two time series of foreign trade and the foreign trade index, using the R. Solow’s growth model. The terms of trade depend on exogenous shocks and are an important factor in the development of gross fixed capital and the GDP growth. The article consists of several blocks: theoretical and methodological, statistical and economic and mathematical. The study determines the relationship of the economic growth of the North Caucasus Federal District with exogenous factors, including an index of foreign trade conditions, presents a multifactorial growth model for the North Caucasus macroregion and short-term growth forecasts taking into exogenous factors. The results confirm the hypothesis about the determinism of economic growth by exogenous factors: the index of foreign trade conditions, the level of openness of the regional economy which should be taken into account when developing a growth strategy for the North Caucasus macroregion.

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