Modelling economic development of an industrial metropolis

Abstract

Current turbulence of external environment pushes the research towards exploring municipalities’ economic development. The purpose of the work is to devise a method for assessing the factors behind economic development of an industrial metropolis based on the construction of a production function. Theoretical propositions of macroeconomics and systems analysis constitute the methodological basis of the research. The main method is the construction of the Cobb–Douglas production function given autonomous Hicks-neutral technical change. The evidence is the data of the Federal State Statistics Service’s regional office of Chelyabinsk Region on the production output (volume of own production (works, service) shipped), cost of production assets, and payroll in the city of Chelyabinsk for 2014–2021, as well as price deflators. The model is formalised in the form of a computer program and is registered by the state, which reflects its practical value. The theoretical and methodological significance of the research consists in that for the first time in economic practice it demonstrates that individual elasticity coefficients can take negative values. The findings of the study can be used for forecasting the results of the interventions aimed at increasing the economic sustainability of an industrial metropolis.