Which growth of GDP was more intensive? Case of the Czech Republic and Slovakia

Thursday, March 12, 2015: 10:20 AM
Petr Wawrosz, Ph.D. , Department of Economics and International Affairs, University of Finance and Administration, Prague, Czech Republic
Jiri Mihola, Ph.D. , University of Finance and Administration, Prague, Czech Republic
The article presents an alternative method to growth accounting. The aim of the method is same as in the case of growth accounting – to express the share of the impact of the change inputs and the share of the change of total productivity factor on the change of the output (here gross domestic product). The change of inputs can be seen as change in extensive factor. Change in total productivity factor is possible to express as a change of intensive factors as it usually caused by some technological, organizational or similar change. The presented method is able to express of all possible types of development, not only unlike growth accounting situation when as total input factors, total productivity factor and GDP increase. It is also able to count the share of extensive and intensive factor in the case of GDP fall or in the situation of GDP stagnation (do not change), however the stagnation occurs in situation when a positive change of intensive factors offsets a negative change of extensive factors or opposite example when a positive change of extensive factors offset a negative change of intensive factors.  Dynamic parameters of intensity and extensity could be delivered as the output of the method. The first one captures the effect of change in the summary productivity of factors, while the latter captures changes in the input quantity. The dynamic parameters were calculated for the development of GDP in the Czech Republic and Slovakia after split up of Czechoslovakia (from 1993). Both countries had similar history – they formed for 74 years (1918 – 1992) one state (Czechoslovakia). It is thus interesting compare their GDP development after split of Czechoslovakia and establishment independent the Czech Republic and the Slovak Republic.