Inflation risks estimation in a restructuring economy in terms of a network production model with infrastructure constraints

The article presents a nonlinear network model of intersectoral balance featuring production functions with constant elasticity of substitution and constraints on the capacities of economic sectors. The mathematical framework of the model is developed through a series of works by the authors and is based on the application of Young duality in convex programming problems that describe resource allocation within the production network. The network model takes into account potential changes in the behavior of economic agents in response to shocks and allows for a clear interpretation of input and output indicators in terms of official national accounts statistics. Our approach enables the calculation of shifts in economic equilibrium within the space of intersectoral supply and prices under shock conditions in a real production network, considering capacity constraints that lead to additional costs. The developed model has been identified using official data from Russian statistics. We apply the model for analysis of medium-term inflation risks in the Russian economy, as well as the impact of constraints related to the underdevelopment of the infrastructure complex on these risks.