Measuring the Efficiency of Economic Growth towards Sustainable Growth with Grey System Theory

Małgorzata Kokocińska,Marcin Nowak,Paweł Łopatka

doi:10.3390/su122310121

Abstract

In the paper, a new indicator exemplifying the conversion efficiency of expenditures towards economic growth into results pertaining to sustainable development, dubbed the “Synthetic Efficiency Indicator for Economic Growth” (hereinafter: “SEI-EG”) has been proposed. The inspiration for proposing such an indicator was the identification of the lack of connections between research on economic convergence and the research area connected with sustainable growth category. It was assumed that, in the first place, outcomes of the proposed convergence will be visible in developed economies, represented by EU15 member states. The set goal was to provide an answer to the question of difference between EU15 member states with respect to efficiency of converging expenditures exemplifying economic growth into results pertaining to sustainable growth. The research was conducted for 2016–2018 using Grey System Theory. With the use of the elaborated indicator, the authors created a ranking list of countries based on the efficiency of economic growth towards sustainable growth criterion. The conducted research proved that, in general, the smaller EU member states are characterized by significantly higher efficiency of converging expenditures exemplifying economic growth into results pertaining to sustainable development in the researched area. Among the countries with large economies, only Germany showed efficiency comparable to smaller ones.

Highlights

Economic convergence is one of the most important issues in comparative research of countries
It is assumed that reaching a relatively high level of economic growth is the basic prerequisite for actions in favor of sustainable growth
The paper presents the concept of a new indicator, exemplifying the conversion efficiency of expenditures in the form of GDP and the general government gross debt into results connected with the sustainable growth in industry, innovation and infrastructure area

Summary

Introduction

Economic convergence is one of the most important issues in comparative research of countries. Research on economic convergence has evolved from analyses of entire economies to regional analyses, especially with the emergence of the European Union’s regional policy. It has become an important element in assessing differences between countries and regions, in terms of the rate of GDP growth itself and in terms of growth factors [1,2]. As emphasized, assessing development policy solely on the basis of convergence criteria, as was done with the EU Cohesion Policy for example, makes little or no sense [9] since convergence does not capture the socioeconomic objective of the policy, which is to emphasize institutional and learning behavior [10]

Methods

Results

Conclusion