Economic Productivity Flip-Flop in the Danube Countries

Productivity emphasizes the strength and vigor of an economy, but could we use it to capture the strength and vigor of the society within which the economic processes take place? This paper analyzes economic productivity in relation with its social dimension. The research hypothesis on which the paper is built is that measuring economic productivity reveals the economic results, but hides the social effects. In order to test the hypothesis we start by computing the capital and labor productivity of the selected countries, scores which in a subsequent stage are summed up in order to establish the total productivity. Further in our analysis we adjust the level of productivity through three equations meant to reflect the fairness of the income distribution, the level of human development and also the sustainability of the economic processes that generate the computed levels of productivity. The paper uses the methodology developed by the author in a previous study. The countries chosen for the empirical analysis are the Danube countries: Austria, Bulgaria, Germany, Croatia, Hungary, Republic of Moldova, Romania, Serbian Republic, Slovak Republic and Ukraine. The research is based on statistical data provided by the World Bank, the Global Footprint Network, Eurostat and the UNDP. All the data we use in this study is for the year 2007, the purpose of the paper being to test the model developed and not to capture current events. The results confirm the hypothesis, showing that the levels of productivity would be much lower if economic activity were scaled by its social implications.