If you use a GPL library in your model, your whole model is a work based on that library and needs to be published as GPL (but only if you distribute it to others; GPL says it's fine for internal use).
If you use LGPL libraries (which many of them are), you only have to publish your modifications of the library as GPL.

Thanks for that clarification - however, it does not answer my question exactly. If I create a library which implements external functions for my Modelica model, does that library (that I have created) have to be published as GPL? Thanks in advance.

-Prasant

It all depends on the license used by external code:
For example, if you use annotation(Library = {"myLibrary", "someGPLLib"}) your model needs to be GPL (but not necessarily myLibrary).
If you use annotation(Library = {"myLibrary"}) , your model AND your library needs to be GPL if and only if myLibrary links to GPL code.

So if you write the model and the library yourself, you're good.