Commodity and Financial Networks in Regional Economics

Valerian V. Popkov, Dmitry B. Berg, Nadezhda A. Selezneva, Yelizaveta A. Ulyanova

Abstract


The article discusses the relationship between commodity-production and financial network structures in the regional economy as dual conjugate systems. Material flows (raw materials, goods and so on) circulate in the commodity network as shown by Leontiev’s input-output balance model. Nonmaterial flows of property rights, money, and so on circulate in the financial network and reflect the movement of material objects in commodity networks. A network structure comprises closed and open circuits, which have fundamentally different characteristics: locally closed circuits meet local demand by supplying locally produced goods, thus ensuring self-reproduction of the local economy; open (or transit) circuits provide export-import flows. The article describes the mechanism of ‘internal’ money generation in closed circuits of commodity-production networks. The results of the theoretical study are illustrated by the calculations of closed and open circuit flows in the municipal economy model. Mutual settlements between the population and manufacturing enterprises are given in matrix form. It was found that the volume of the turnover in closed circuits of the municipal economic network model is about 28.5 % of the total turnover and can be provided by ‘internal’ non-inflationary money. The remaining 71.5 % of the total turnover correspond to the flows in the network’s open circuits providing export and import. The conclusion is made that in the innovation-driven economy, main attention should be given to the projects oriented towards domestic consumption rather than export supplies. The economy is based on internal production cycles in closed circuits. Thus, it is necessary to find the chains in the inter-industrial and inter-production relations which could become the basis of the production cycle. Money investments will complete such commodity chains and ‘launch’ the production cycle.


Keywords


regional economy; commodity network; financial network; dual systems; closed financial flows; local currency; self-reproduction of economy

Full Text:

PDF

References


Astafyev, N. M. (2010). Matrichnyy instrumentariy analiza balansovoy modeli i zadachi lineynogo programmirovaniya [Matrix tools of the balance model analysis and problem of linear programming]. Trudy IMM UrO RAN [Works of the Institute of Mathematics and Mechanics, UB RAS], 16, 3, 3-11.

Gezel, S. Yestestvennyy ekonomicheskiy poryadok [Natural economic order]. Available at: http://www.demandandsupply.ru/gesell.html (date of access: 18.05.2014).

Yeremien, I. I. (2001). Dvoystvennost v lineynoy optimizatsii [Duality in the linear optimization]. Yekaterinburg: UB RAS, 179.

Ignatova, M. A., Selezneva, N. A. & Ulyanova, Ye. A. (2014). Munitsipalnaya ekonomika. Model finansovoy seti vnutrennego rynka [Municipal economy. Model of financial network of domestic market]. Sovremennyye problemy nauki i obrazovaniya [Modern problems of science and education], 2. Available at: http://www.science-education.ru/116-12901 (date of access: 08.05.2014).

Kastels, M.; Inozemtsev, V. L. (Ed.). (1999). Stanovlenie obshchestva setevykh struktur [New post-industrial wave in the West. Anthology]. Novaya postindustrialnaya volna na Zapade. Antologiya [New post-industrial wave in the West. Anthology]. Moscow: Academia, 494-505.

Leontyev, V. V. (2006). Obshcheekonomicheskie problemy mezhotraslevogo analiza [All-economic problems of the interindustry analysis]. Izbrannyye proizvedeniya v 3-kh t. T.1. [Selected works in 3 vol. Vol. 1]. Moscow: Economika, 407.

Lesh, A. (2007). Prostranstvennaya organizatsiya khozyaystva: per. s nem. [Spatial organization of economy: trans. from German]. Edited by Academision A. G. Granberg. Moscow: Nauka, 663.

Lietar, A. Bernar (2007). Budushcheye deneg [Future of money]. Moscow: KRPA Olimp; Astrel, 493.

Maturana, U. & Varela, F. (2001). Drevo poznaniya. Biologicheskie korni chelovecheskogo ponimaniya [Tree of knowledge. Biological roots of human understanding]. Translated from English by Yu.A. Danilova. Moscow: Progess-Traditsiya, 224.

Novikov, S. P. (2002). Topologiya [Topology]. Moscow — Izhevsk: Institute of Computer Science, 336.

Popokov, V. V. (2014). Ekonomicheskiy konstruktivizm. Uskolzayushchaya realnost: chto kroyetsya za obektivnostyu ekonomicheskoy nauki? [Economic constructivism. The elusive reality: what is behind of objectivity of economic science?]. Moscow: Lenand, 200.

Titov, L. Yu. (2009). Printsipy formirovaniya innovatsionnykh setey v realnom sektore ekonomiki [The principles of the innovative network development in real sector of economics]. Problemy sovremennoy ekonomiki [Problems of modern economics], 1, 64-67.

Fridman, M. (2002). Osnovy monetarizma [Principles of monetarism]. Moscow: TEIS, 175.

Khayek, F. A. (1996). Chastnyye dengi [Private money]. Moscow: BAKOM, 112.

Kharris, L. (1990). Denezhnaya teoriya [Monetary theory]. Moscow: Progress, 728.




DOI: https://doi.org/10.15826/recon.2015.2.013

Copyright (c) 2018 Valerian V. Popkov, Dmitry B. Berg, Nadezhda A. Selezneva, Yelizaveta A. Ulyanova

© R-Economy, ISSN 2412-0731