Economic Policy within the Framework of Regional Union Taking into Account Budgetary Equilibrium and Government Debt

Abstract

Estimates were obtained in the form of a regression function of the main macroeconomic indicators of national economy by example of the economy of the Republic of Kazakhstan within the framework of its operation as a part of regional customs union and interaction with the rest of the world. After testing for spurious regression functions the econometric model was built for small open economy of the Republic of Kazakhstan and its sustainability indicator was evaluated. This model describes budgetary equilibrium conditions taking into account government debt as well as equilibrium conditions in the markets of goods, money, and capital. Macroeconomic analysis has been conducted on the basis of the model. Proposed and illustrated an approach of estimating the optimal values of economic policy instruments in the functioning of the national economy within the regional customs union and its interaction with the outside world. The task of parametric control of macroeconomic indicators of national economy based on the econometric model taking into account constrains to budget deficit, government debt and inflation is formulated and solved.