Equilibrium Discrepancy between GDP and GNP in Poland
Equilibrium Discrepancy between GDP and GNP in Poland
Author(s): Maciej K. DudekSubject(s): National Economy, Business Economy / Management, International relations/trade, Economic development
Published by: Instytut Nauk Ekonomicznych Polskiej Akademii Nauk
Keywords: GDP; GNP; production function; long run equilibrium; foreign investment; Poland;
Summary/Abstract: In this paper a theoretical approach, based on Cobb-Douglas production function, is used to assess the difference between the GDP and GNP values in Poland. The results suggest that in the long run GDP in Poland will be about 9.5% higher than GNP implying that the actual income levels enjoyed by Polish nationals will be lagging those implied by GDP by about three years. Furthermore, the author suggests that the actual consumption levels in Poland will be maximized in the long run when foreign capital is fully absent, and that consumption in Poland could be increased by about 4% when foreign ownership of capital is fully absent, thanks to the reduction in the domestic interest rate driven by higher saving rates.
Journal: Ekonomista
- Issue Year: 2018
- Issue No: 3
- Page Range: 301-317
- Page Count: 17
- Language: English
