Supply- and demand-side sources of economic growth in Poland and the largest EU member states in 2000–2018

Abstract

The low rate of economic growth persisting in developed countries for nearly two decades has led researchers to focus on analysing the sources of economic growth from the supply and demand perspective. They concentrate on defining the causes for the differentiation of countries in terms of capacity for economic growth, factors hindering economic activity and convergence. The aim of the paper is to evaluate the contribution of supply and demand factors to economic growth in Poland and the largest EU countries in 2000–2018. The study period was divided into three shorter periods: 1) 2000–2007 (relatively good economic conditions, with the exception of a 2001–2003 recession), 2) 2008–2013 (recession and stagnation), and 3) 2014–2018 (post-crisis revival). Supply-side factors contributing to the GDP growth encompassed: total hours worked, labour quality, non-ICT capital, ICT capital, and TFP growth. Demand-side factors included the inputs of private and public consumption, investment and gross exports. The reference countries for Poland were: France, Spain, Germany, the UK and Italy. The conclusion is that the economic dynamics of Poland in 2000–2017 was relatively high in comparison to the reference countries, and its supply-side sources positively affected the growth in labour productivity and TFP. Analysis of the aggregate demand structure indicated the predominance of private consumption in Poland throughout the research period, while the contribution of investment remained low for nearly two decades.