Non-linear Impact of Investments on Economic Growth
DOI:
https://doi.org/10.18778/1508-2008.7.09Abstract
In classical macromodels of economic growth the rate of GDP per one employee is a linear function of the investment rate. Meanwhile, strong social and organisational barriers appear, which slow down growth, with high investment rates and low consumption rates. That is why, we propose non-linear relations such as, for instance, the logistic function. A hypothesis about a nonlinear impact of the investment rate on the rate of GDP per one employee will be verified on the example of the Polish economy in the years 1967–2001.
The relationship seems to be described best by the transformed logistic function. The results yielded by estimation of this function allow to presume that a high investment rate – above 30% leads to raising GDP growth rate by not more than seven percentage points (in comparison with the investment rate close to zero).
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