Cracow University of Economics Poland. Overview. Sources of Real GDP per Capita Growth: Polish Regional-Macroeconomic Dimensions

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Maciej Sobczyk
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1 Cracow University of Economics Sources of Real GDP per Capita Growth: Polish Regional-Macroeconomic Dimensions Key Note Speech - Presented by: Dr. David Clowes The Growth Research Unit CE Europe Cracow University of Economics,. Overview Real GDP/Capita is the market value of goods and services available to a country s citizens and as such is regarded as the best measure of welfare. The Case Earlier research on growth performance across s sixteen regions has highlighted the presence of serious economic disparities, especially down the Eastern wall of the country. Objective The aim of this study is to show that a process of convergence between the Eastern regions of the country and the comparatively better developed Western regions has been initiated. Methodology: The Decomposition Technique 1

pl Overview Real GDP/Capita is the market value of goods and services available to a country s citizens and as such is regarded as the best measure of welfare.

2 Regional Welfare (Real GDP Capita) Income Distribution Effects (% of National Level 2005) ZACHODNIOPOMORSKIE LUBUSKIE WIELKOPOLSKIE DOLNOŚLĄSKIE POMORSKIE KUJAWSKO -POMORSKIE OPOLSKIE WARMIŃSKO-MAZURSKIE ŁÓDZKIE 76.2 MAZOWIECKIE 8.9 ŚWIETOKRZYSKIE 74.1 PODKARPACKIE ŚLĄSKIE MAŁOPOLSKIE A > 80% of National Level B < 80% of National Level 84.2 PODLASKIE LUBELSKIE 68.0 Polish Real GDP/Capita = 23,292 PLN (100%) Av. USD = 3.23 PLN Year 2005 Best performing B regions around 25% of the national level Are B regions showing any signs of convergence? Where: gdp Measuring Convergence in Welfare Chosen Methodology Decomposition Technique for Real GDP Capita gdp hours employment hours employment GDP = gross domestic product Pop = total ulation Hours = total number of hours worked Employment = number of people employed Pop = Population of working age (aged and above) 2

1 PODKARPACKIE ŚLĄSKIE MAŁOPOLSKIE A > 80% of National Level B < 80% of National Level 84.2 PODLASKIE 67.9 74.4 LUBELSKIE 68.0 Polish Real GDP/Capita = 23,292 PLN (100%) Av. USD = 3.

3 Average Annual Percentage Change ( ) Output (%) Av. Real GDP Capita 5.95% Clowes, Polish Real GDP Capita Decomposed GDP/Hours 5.71% Labour Productivity Hours/empl. Empl./Pop 0.37% 0.66% Pop /Population Work Effort Av. Sum of variables 5.75% Margin of Error 0.19% -0.99% Employment Rate Demographic Factor Regional Labour Productivity Performance Average Yearly Change (%) ZACHODNIOPOMORSKIE LUBUSKIE WIELKOPOLSKIE DOLNOŚLĄSKIE > 4.5% < 4.5% 3.7 POMORSKIE KUJAWSKO -POMORSKIE 2.3 OPOLSKIE WARMIŃSKO-MAZURSKIE ŁÓDZKIE 4.8 MAZOWIECKIE ŚWIETOKRZYSKIE 2.0 ŚLĄSKIE MAŁOPOLSKIE PODLASKIE LUBELSKIE 3.7 PODKARPACKIE Polish Labour Productivity increased by a total 28.6% over (Av. 5.7%) Regions Achieving > 4.5% 1. Mazowieckie 2. Podlaskie 3. Podkarpackie 4. Lubuskie 5. Warmińsko-Mazurskie 6. Śląskie 3

99% Employment Rate Demographic Factor Regional Labour Productivity Performance Average Yearly Change 2000-2005 (%) ZACHODNIOPOMORSKIE 0.8 5.0 LUBUSKIE 3.4 3.6 WIELKOPOLSKIE DOLNOŚLĄSKIE > 4.5% < 4.

4 Region Podkarpackie Lubelskie Podlaskie Warmińsko-Mazurskie Świętokrzyskie Opolskie Małopolskie Kujawsko-Pomorskie Lubuskie Zachodniopomorskie Łódzkie Pomorskie Dolnośląskie Wielkopolskie Śląskie Mazowieckie Labour Productivity 2005 GDP/Hours (PLN) 9,405 10,710 11,622 11,630 11,931 13,091 14,430 14,681,821,430 16,782 16,961 18,294 18,513 19,862 20,104 32,554 Labour Productivity (Total Change % ) 28.6% 18.5% 30.9% 23.8% 10.1% 11.6% 17.5% 10.2% 25.0% 3.8% 20.0% 18.1% 28.6% 17.0% 18.6% 23.7% 31.8% GDP per Capita Regional Welfare 2005 Relationship between hours worked & real output per head 40,000 35,000 30,000 25,000 20,000,000 Mazowieckie Sląskie Dolnosląskie : Hours = 1,683 GDP/Capita = 23,297 Mazowieckie: Hours = 1,526 GDP/Capita = 37,029 Podlaskie: Hours = 2,8 GDP/Capita = 17,341 Wielkopolskie Łódzkie Lubuskie Małopolskie Kujaw sko-pomorskie Świętokrzyskie Lubelskie Pomorskie Zachodnio-Pomorskie Warmińsko-Mazurskie Opolskie Podlaskie Podkarpackie 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 Hours 4

(Total Change % ) 28.6% 18.5% 30.9% 23.8% 10.1% 11.6% 17.5% 10.2% 25.0% 3.8% 20.0% 18.1% 28.6% 17.0% 18.6% 23.7% 31.

5 Concluding Points 1. Polish real gdp/capita grew by 6% over the period Labour productivity was the most important component, increasing by 5.7% over time. 3. Three out of the five Eastern wall regions ( B) were among those achieving the highest increases in labour productivity, suggesting that some early signs of convergence are evident. 4. This is also consistent with some of the observed shifts in the structure of employment in the country agriculture to industry. 5. B regions overall tend to work far greater hours in contrast to the developed west of the country and generate lower output/income per head... 5

Three out of the five Eastern wall regions ( B) were among those achieving the highest increases in labour productivity, suggesting that some early signs of

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