Labour productivity in Italian regions: A gravitational model approach

Filipowicz Katarzyna (), Kelebaj Oleksij () and Tokarski Tomasz ()
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Filipowicz Katarzyna: Department of Mathematical Economics, Jagiellonian University, 24 Gołębia St, 31-007 Cracow, Poland
Kelebaj Oleksij: Faculty of Management and Social Communication, Jagiellonian University, 24 Gołębia St, 31-007 Cracow, Poland
Tokarski Tomasz: Department of Mathematical Economics, Jagiellonian University, 24 Gołębia St, 31-007 Cracow, Poland

Economics and Business Review, 2024, vol. 10, issue 2, 92-117

Abstract: The aim of the paper is to assess the causes of spatial variations in labour productivity of Italian regions using the gravitational model of economic growth. The model is an extension of Robert Solow’s economic growth model. The model parameters are calibrated using historical data and numerical simulations of the long-run equilibrium states of the model are carried out. The scenarios considered in the paper vary in forecast investment rates, employment growth rates and urbanisation rates. Based on the results of numerical simulations, it is claimed that to achieve the full convergence in labour productivity, it is necessary to maintain higher investment rates in the south of the country than in Lombardy (by about 4%–11%), and to keep investment rates in central and northern Italy at a similar level as in Lombardy. The fall in investment has affected the poorest regions, Southern Italy, the most, followed by central Italy and the richest regions of the north of the country the least.

Keywords: model of economic growth; labour productivity; Italian regions (search for similar items in EconPapers)
JEL-codes: C2 E23 O47 R11 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ecobur:v:10:y:2024:i:2:p:92-117:n:1002

DOI: 10.18559/ebr.2024.2.1027

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