E23 - Macroeconomics: ProductionReturn

The main aim of this paper is to consider if it is the extensive or intensive growth sources which prevail in particular member states of the EU during the total productivity of production factors in different phases of the business cycle of the EU. The paper focuses on the period of 1996-2011, i.e. 16 years. The conducted analysis revealed that there is a relation between the extensive and intensive growth sources on the economic cycle. It was found that in economic growth periods, the importance of the intensive growth increases, while in the periods when the gross added value increases, the dominant role is played by the extensive growth. From the point of view of particular member states of the EU, the analysis identified that there are significant differences between the old member states of the EU and the new member states. In the new member states, the extensive growth factor has a significantly higher influence, which is related to the increase of their production capacity.

The Cramer's rule provides a method of solving a system of linear equations through the use of determinants. The Hessian can be used for a test whether a given critical point is a local minimum or maximum of a function of two or more real variables. In the article the use of the Cramer's rule and the Hessian is demonstrated on economic optimization problems.