Nonlinear input-output balance and Young duality: analysis of Covid-19 macroeconomic impact on Kazakhstan

Аннотация

We discuss the possibilities of the new approach to the
inter-industry linkages modeling for the analysis of regional macroeconomic effects
of Covid-19. Our approach is based on the mathematical framework of nonlinear
input-output balance that allows to find the equilibrium point in the set of
industry inputs and prices by solving the primal nonlinear resource allocation
problem and the Young dual problem of prices formation. We identify and calibrate
the model on the base of aggregated official input-output statistics of Kazakhstan.
Given the sce\-na\-rio conditions for primal factors prices and final consumption
in the economy the model allows to evaluate the new competitive equilibrium in the
production network. The advantage of the model is non-linearity of balances and
technologies that allows substitution of industry inputs. In the case of
technologies with constant elasticity of substitution (CES) we apply the model to
analysis of macroeconomic responses of the Kazakhs\-tan economy to the Covid-19
pandemic.