Adequacy of Economic Dynamics Models

Models of economic dynamics are too aggregate, so inadequate of the real economy. Their mistakes are too large, so the analyst can not identify the real economic dynamics. We developed an adequate causal simulation model, reflecting the economy as a closed system with positive feedback of the investment from incomes and economic growth from investment. For this, the author introduced the concept of technical productivity of investments, which measures their ability to change the rate of material or labor costs. Based on it, we have derived the equation (not Harrod identity, which was true for 6 countries from 88) of economic dynamics. We defined the limits of an investment’s technical productivity, for which the investor receives the desired payback, and an economy in maximal development. We have identified the upper limit of lending that does not yet lead to a crisis. The model reflects 7 main shady activities. The most influential are: the illegal production and overstating material expenses. The growth of almost all shadow parameters impact on the economy of Ukraine and on the non-tax revenue positively and negative - on contributions to social insurance funds and pension funds.