LABOUR PRODUCTIVITY SIMULATIONS IN UKRAINIAN REGIONS: ANALYSIS BASED ON A GRAVITATIONAL GROWTH MODEL
LABOUR PRODUCTIVITY SIMULATIONS IN UKRAINIAN REGIONS: ANALYSIS BASED ON A GRAVITATIONAL GROWTH MODEL

Summary/Abstract: The purpose of the article is to build a gravitational growth model of Ukrainian economy. The correlation of the labour productivity macroeconomic indicator and its empirical verification is considered. The article looks at recent research dealing with data analysis of region groups as of 2004-2017. To determine the conditions for economic development of the regions, the magnitude and the possible influence of the main macroeconomic factors were assessed. The methodology of gravity modelling makes it possible to study the significance of each individual factor on the basis of statistical information and to predict these factors within the context of possible scenarios. Methods of statistical analysis and econometric modelling were used to build a gravity model and to assess its statistical significance and forecasting ability for economy. The methodological principles of the gravity theory in the context of the set tasks involve studying both regional GDP indicators and the geographical location and remoteness from the capital. The paper presents the influence of two macroeconomic aggregates on the dynamics of economic development - labour productivity and physical capital per worker, with account of their relationship to gravitational effects. The economic analysis uses regional statistical data available on the website of the State Statistical Service of Ukraine. As a result, three main conclusions were formulated. First, 2001-2008 was the most favourable period for the development of Ukrainian economy (after the restoration of Ukraine's independence in 1991). Second, future strong positions of the Northern Ukraine were identified (Kyiv city, Kyiv region with account taken of the expected side effect). Third, a long-term one, to implement the regional development policy the volume of regional investment should be increased. In turn, investment attractiveness of the remote regions, with a relatively low expected economic polarization, will also increase.

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