TY - JOUR

T1 - Redistribution of Resources between the Private and Public Sectors of the Spatial Economy: An Agent-Based Approach

AU - Suslov, Viktor I.

AU - Tsyplakov, Aleksandr A.

AU - Novikova, Tatyana S.

N1 - The article has been prepared with the support of the Russian Science Foundation (project No. 23-28-01499).

PY - 2023

Y1 - 2023

N2 - Redistribution of resources between the private and public sectors is a key issue of state policy analysis, including at the regional level. The article examines how changes in tax rates and social transfers affect the redistribution of financial resources, fixed capital and labour. The study utilised a spatial agent-based model focused on microeconomic decisions of households and enterprises. Fixed capital depends on investment policies of private and public companies; demand and supply are balanced in the labour market for a given total labour force. Tax rates and distribution of social transfers are seen as the institutional framework for making microeconomic decisions. At the meso- and macro-levels, state policy changes affect the economic structure of regions, industries, public and private sectors. The use of capital, labour and financial resources was assessed to calculate the relative size of the public sector. Simulations of changes in transfers and taxes show opposite trends in the proportion of the sectors. At given tax rates, the expansion of social transfers reduces social inequality and causes profound structural changes in the economy due to decreased provision of public goods and increased income of recipient households. The size of the public sector in terms of the use of financial resources remains practically unchanged: its share in gross domestic product decreased from 32.2 % to 30.4 %. However, the shares of capital (by 9.9 %) and labour (by 14.7 %) noticeably declined in this sector, indicating a redistribution of capital and labour from the public to the private sector. On the contrary, tax hike leads to an increase in the main indicators characterising the share of the public sector, while most of the private sector indicators fall sharply and social inequality rises significantly.

AB - Redistribution of resources between the private and public sectors is a key issue of state policy analysis, including at the regional level. The article examines how changes in tax rates and social transfers affect the redistribution of financial resources, fixed capital and labour. The study utilised a spatial agent-based model focused on microeconomic decisions of households and enterprises. Fixed capital depends on investment policies of private and public companies; demand and supply are balanced in the labour market for a given total labour force. Tax rates and distribution of social transfers are seen as the institutional framework for making microeconomic decisions. At the meso- and macro-levels, state policy changes affect the economic structure of regions, industries, public and private sectors. The use of capital, labour and financial resources was assessed to calculate the relative size of the public sector. Simulations of changes in transfers and taxes show opposite trends in the proportion of the sectors. At given tax rates, the expansion of social transfers reduces social inequality and causes profound structural changes in the economy due to decreased provision of public goods and increased income of recipient households. The size of the public sector in terms of the use of financial resources remains practically unchanged: its share in gross domestic product decreased from 32.2 % to 30.4 %. However, the shares of capital (by 9.9 %) and labour (by 14.7 %) noticeably declined in this sector, indicating a redistribution of capital and labour from the public to the private sector. On the contrary, tax hike leads to an increase in the main indicators characterising the share of the public sector, while most of the private sector indicators fall sharply and social inequality rises significantly.

KW - agent-based modelling

KW - investment behaviour

KW - public sector

KW - social policy

KW - social transfers

KW - taxes

UR - https://www.scopus.com/record/display.uri?eid=2-s2.0-85175561106&origin=inward&txGid=814d47a75d26a2fbde6a792983a9b3f6

UR - https://www.elibrary.ru/item.asp?id=54610758

UR - https://www.mendeley.com/catalogue/8be21323-1aa6-31af-b31b-8451868e7478/

U2 - 10.17059/ekon.reg.2023-3-2

DO - 10.17059/ekon.reg.2023-3-2

M3 - Article

VL - 19

SP - 612

EP - 628

JO - Экономика региона

JF - Экономика региона

SN - 2072-6414

IS - 3

ER -