Modeling economic growth of countries based on total factor productivity
The paper investigates the relationship between economic growth and its determinants -capital, labor and total factor productivity for some countries using econometric modeling techniques. The author formulated the hypothesis on linear dependence of annual GDP growth rate from gross capital formation growth rates, the number of employees growth rates, and annual percentage change in total factor productivity (TFP). To confirm the hypothesis, the macro economic growth model for countries with similar characteristics of innovation potential was constructed. The analysis showed that for most countries the greatest impact on economic growth provides TFP dynamics. For Ukraine, the influence of annual percentage change in TFP on GDP growth is less compared to the influence of the dynamics of employment. Using econometric modeling for Romania, Turkey and Ukraine obtained predicted values of macroeconomic indicators until 2030 - an annual growth rate of GDP, growth rates of gross capital formation, the annual percentage change in TFP and the annual growth rate in employment for optimistic, baseline, pessimistic scenarios. Found that the development of the optimistic scenario will almost halve the gap between Ukraine and the EU in terms of GDP per capita and labor productivity. Baseline scenario provides a moderate growth and pessimistic scenario actually saves gap that exists at the current time. Therefore, the leading targets for national development strategy should select indicators base / optimistic scenarios and make necessary efforts towards increasing TFP determinants through innovative development. Given demographic trends, should recognize the necessary change model of economic growth in Ukraine to strengthen the impact on economic growth annual percentage change of total factor productivity.