THE IMPACT OF SUPPLY BOTTLENECKS ON INVESTMENT EFFICIENCY
THE IMPACT OF SUPPLY BOTTLENECKS ON INVESTMENT EFFICIENCY
Author(s): Jan Jacek Sztaudynger, JAN MAREK SZTAUDYNGERSubject(s): National Economy, Business Economy / Management, Financial Markets
Published by: Instytut Nauk Ekonomicznych Polskiej Akademii Nauk
Keywords: economic growth; physical capital investment; supply bottleneck; Solow model; endogenous growth model;
Summary/Abstract: In the paper, the impact of physical capital investments on macroeconomic growth is examined. The authors try to show to what extent it depends on the supply bottleneck (disequilibrium), which existed before the investment and which is eliminated by this investment. The narrower the bottleneck and the more it slows down macroeconomic growth, the more output growth will result from this investment in physical capital. In or- der to verify this hypothesis, the growth model was modified. Because bottlenecks occur irregularly, GDP fluctuations generated by the model are also irregular (non-cyclical). The authors propose to estimate the macroeconomic bottleneck by the average lagged GDP growth (lags 2 to 6 years). The results of calculations made for Poland’s economy in the years 1997–2019 confirm that economic slowdown preceding investments strengthens their growth effect.
Journal: Ekonomista
- Issue Year: 2022
- Issue No: 1
- Page Range: 23-40
- Page Count: 18
- Language: English
