The Neoclassical Model of Economic Growth and Its Ability to Account for Demographic Forecast
Oglądaj/ Otwórz
Data
2018Autor
Dykas, Pawel
Mentel, Grzegorz
Misiak, Tomasz
Metadane
Pokaż pełny rekordStreszczenie
The main objective of this article is an attempt to
develop the neo-classical growth model of Solow by repealing the
assumption of a constant rate of increase in the number of
employees. The authors assume that the growth path of the number
of employees is equal to the product of population growth paths and
the economic activity coefficient understood as the ratio of the
number of employees to the size of the population. Taking into
account the increase in the number of employees from the size of
the population, the authors introduce the issues of demographic
processes to the model. Such a modification means that the growth
path of the number of employees increases asymptotically to a fixed
value (resulting from the forecast) and not to infinity, as it is the
case in the Solow model. In the empirical part they calibrate the
parameters of the obtained model and carry out numerical
simulations for the Polish economy in the period 2000-2050. In the
simulation they use demographic forecasts for the Polish economy
up to 2050, which shows that the population in Poland fell from
38,26 million people in 2000 to 33,95 million people in 2050. It
turns out that the decline in population size does not have to have a
negative impact on both the number of employees and economic
growth. The Polish economy in 2000 was characterized by one of
the lowest economic activity rates (τ = 0.38) among EU economies.
Therefore, the study considers two scenarios for shaping the
economic activity coefficient for the Polish economy: realistic when
τ in the period 2000-2050 increases from 0.38 to 0.5. The adoption
of τ = 0.5 in 2050 is due to Poland’s average level, which
characterized the economies with the highest level of this indicator
among EU economies in 2016, namely: British, Dutch, German
and Swedish. In the second scenario it was optimistic that the
increase in τ will be 50% higher than in the first variant and in
2050 it will reach the level of 0.56.
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