Baltic Journal of Economic Studies (Nov 2017)
REGULATORY POLICY AND OPTIMIZATION OF INVESTMENT RESOURCE ALLOCATION IN THE MODEL OF FUNCTIONING OF RECREATION INDUSTRY
Abstract
The research objective is the rationale of the theoretical and methodical approach concerning the improvement of regulatory policy as well as the process of distribution of financial investments using the model of the functioning of a recreational sector of the national economy. The methodology of the study includes the use of optimal control theory for the model formation of the functioning of the recreational industry as well as determining the behaviour of regulatory authorities and capabilities to optimize the allocation of investment resources in the recreational sector of the national economy. Results. The issue of equilibration of regulatory policy in the recreational sector of the national economy is actualized, including the question of targeted distribution of state and external financial investments. Also, it is proved that regulatory policy should establish the frameworks that on the one hand, do not allow public authorities to exercise extra influence on the economy of recreation, on the other hand, to keep the behaviour of the recreational business entities within the limits of normal socio-economic activity – on the basis of analysis of the continuum “recreation – work” by means of modified Brennan-Buchanan model. It is revealed that even with the condition of the tax reduction, the situation when the population resting less and works more than in the background of a developed economy is observed. However, according to the optimistic forecast, eventually on condition when the economy is emerging from the shade, we will obtain an official mode of the work in which, while maintaining taxes on proposed more advantageous for the population level, ultimately the ratio leisure and work will be established which is corresponding to the principles of sustainable development. Practical value. On the basis of methodical principles of the theory of optimal control, the model of the functioning of the recreational industry under the conditions of transitivity of the national economy is developed, particularly includes a component of the management of investment resources. As a part of the proposed model, the peculiarities of the functioning of the recreational sector as a combination of recreational enterprises are explored as well as the factors of a behaviour of relevant regulatory authorities are analysed that can be used in the practical activities of recreational business entities. Originality. The paper developed a fundamentally new approach to the analysis of the functioning and management of enterprises in the recreational sector on the basis of economic-mathematical modelling using elements of the optimal control theory. The methodological approach to the rationale of the regulatory policy’s role in establishing optimal points on the continuum “recreation – work” is also improved.
