Simulation of Trajectories of Labour Productivity in Polish Regions; Analysis Based on Gravity Model of Economic Growth

Abstract

The paper presents the essence of the gravity model of economic growth and the way of calibrating its parameters for the voivodeships in the years 2000-2014. Using the calibrated parameters of the model, numerical simulations were performed. These simulations were used to set the trajectories of labor productivity in the voivodeships in the years 2015-2050. Four different scenarios were considered in the numerical analysis (concerning the structure of investment rates in voivodeships and GDP growth rates of countries bordering Poland). Regardless of the scenario adopted in this analysis, a divergence of labor productivity at the level of the voivodeships would take place. This process would be stronger if the structure of investment rates were to remain at the level of the average for years 2000-2014 in individual voivodships, than if the investment rates were the same for all voivodeships. In addition, numerical simulations confirmed the hypothesis that faster economic growth of countries bordering Poland leads to faster labor productivity growth in all voivodeships.(original abstract)