SAVINGS, INVESTMENT, CAPITAL TO LABOUR RATIO AND LABOUR PRODUCTIVITY IN THE EUROPEAN UNION OVER THE PERIOD 2000-2022
SAVINGS, INVESTMENT, CAPITAL TO LABOUR RATIO AND LABOUR PRODUCTIVITY IN THE EUROPEAN UNION OVER THE PERIOD 2000-2022

Summary/Abstract: This article examines the relationship between savings and labour productivity at a level of generality appropriate to macroeconomic analysis. The aim is to validate the logical connection between these two categories. The study begins with an analytical approach, using theoretical models to demonstrate how savings are transformed into investment, investment into physical capital, and then - by increasing the capital-labour ratio - into labour productivity growth. These relationships are then verified empirically through correlation and cointegration analysis. The findings confirm the validity of the analytical reasoning. They indicate a logical link between savings and labour productivity at the macroeconomic level, although this link tends to weaken as GDP per capita increases. This analysis is diagnostic and cognitive in nature, offering high-level insights into the issue of labour productivity at the national level.

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