Structural change versus turnpike optimality: A Polish perspective

Using a modified dynamic IO model for Poland which allows taking into account actual trends observed in recently available statistical data we compare the rate of economic growth calculated for different growth paths resulting from the model. The goal of the research was to examine the distance between the actual structure of production and the structure on the turnpike and its impact on the economic growth of the economy under study. The results of the study indicate that the impact of structural change on output takes place in three general stages. The benefits of structural change do not outbalance the corresponding costs immediately, since it takes several periods until the growth rate of those paths which are closer to the von Neumann ray become larger than the corresponding growth rate of the benchmark growth path.