Mechanisms of Investments Formation in the Russian Economy and their Impact on Economic Growth

This paper proposes a model of investment formation in the economy and an assess their impact on economic growth. This model can be divided into two main levels: the construction of a model of gross domestic product (GDP) and the construction of a model of gross fixed capital formation (GFCF). A modified production function is used to model GDP. Labor is represented by the number of employed people in the economy. The capital is described through GFCF, which can be divided into two main areas of use. The first direction is the increase of capital in the economy: the construction of new buildings, plants, structures, etc. The second one is the use of capital to load current capacity. Investments decomposition in fixed capital by sources of financing is used in modeling of GFCF. Within the framework of decomposition, a regression for each element of the investment structure is constructed. Investments in fixed capital can be divided into investments at the expense of own funds and investments at the expense of borrowed funds. The valuation of own funds is proposed through the evaluation of profit remaining at the disposal of companies and depreciation. Attracted funds are described through credit, budget and other investments. Credit investments include loans from local and foreign banks, as well as borrowed funds from other organizations. Budget investments include the costs of increasing or creating capital construction projects from the Federal, regional and local budgets, as well as from extra-budgetary funds. Other investments mainly include funds of parent organizations, funds of legal entities and individuals for equity construction, as well as funds received from the issuance of bonds and shares.