Econometric policy evaluation: A critique

Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process.

Two-person Cooperative Games

Measuring Business Cycles

Suppose you believe your economy is in the doldrums because people are somehow not spending enough. How do you get them to open up their pocketbooks? Start by perusing some data. You’ll quickly discover that spending is highly correlated with income. It’s well documented that if, in any given year, Alice out-earns Bob by a dollar, then on average she’ll outspend him by at least 90 cents.1 Aha! Problem solved! If you want people to spend more, you should start by raising their incomes. Encourage your government to hire Alice and raise her salary by a dollar. She’ll spend an extra 90 cents or so—and that’s only the beginning. If she spends that 90 cents at the butcher shop or the hair salon or the craft brewery, then the butcher or the beautician or the brewer earns an extra 90 cents and probably spends about 90 percent of that, which raises yet someone else’s income, and off we go. When all is said and done, one dollar of additional government spending can raise total spending (and total income) by $10 or more. That’s the story of the so-called “Keynesian multiplier.” Once upon a time, pretty much all economists considered it a cornerstone of policymaking. Here’s the problem: Income is indeed highly correlated with spending. But correlation is not causation. When Alice out-earns Bob by a dollar, she typically outspends him

The Permanent Income Hypothesis

Cykl koniunkturalny w Polsce - wnioski z analizy spektralnej

http://bankikredyt.nbp.pl/content/2004/2004_02/gradzewicz.pdf

Szacowanie luki popytowej dla gospodarki polskiej przy wykorzystaniu metody VECM

There are many issues associated with the Eurozone accession of Poland. The goal of this paper is to analyse one, but very important aspect, namely – the macroeconomic impact of the loss of autonomous monetary policy. In order to answer this question, we build a two country DSGE model with sticky prices. We begin by evaluating the performance of our model. Next, we investigate how joining the Eurozone will affect the business cycle behaviour of the main macroeconomic variables in Poland. We find that the Euro adoption will have a noticeable impact on the Polish economic fluctuations. In particular, the volatility of domestic output increases and the volatility of inflation decreases. Also, in order to quantify the effect of the Euro adoption, we compute the welfare effect of this monetary policy change. Our findings suggest that the welfare cost is not large.

/pdf/the-macroeconomic-effects-of-losing-autonomous-monetary-3ady5okdkd.pdf

The Macroeconomic Effects of Losing Autonomous Monetary Policy after the Euro Adoption in Poland

Using a growth accounting exercise based on new estimates of flows of capital and labor services in the Polish economy during the period 1995-2013, we study the consequences of the recent global economic crisis for the observed pace and structure of economic growth in Poland – a converging open economy which itself did not contribute to the breakout of the crisis. We thus provide a supply-side explanation why Poland fared so well during the world economic crisis. According to our results, the exceptional performance of the Polish economy in 2008-10 was an effect of several favorable circumstances. In particular, and unlike other European countries, it recorded both a marked increase in capital deepening and an improvement in workforce composition. We also find that the recent recession has not exerted any significant impact on the efficiency with which economic resources are used for production in Poland.

/pdf/poland-s-exceptional-performance-during-the-world-economic-2bqkrbevvf.pdf

Poland's Exceptional Performance During the World Economic Crisis: New Growth Accounting Evidence

This article analyses the macroeconomic impact of the loss of autonomous monetary policy after the euro adoption in Poland. Using a two-country Dynamic Stochastic General Equilibrium (DSGE) model with sticky prices and wages, we find that the euro adoption will have a noticeable impact on the magnitude of economic fluctuations. In particular, the volatility of output, interest rate, consumption and employment is expected to increase while the volatility of inflation should decrease. Also, in order to quantify the effect of the euro adoption, we compute the welfare effect of this monetary policy change. Our findings suggest that the welfare cost is not large.

Michał Gradzewicz

Papers

Cykl koniunkturalny w Polsce - wnioski z analizy spektralnej

Szacowanie luki popytowej dla gospodarki polskiej przy wykorzystaniu metody VECM

The Macroeconomic Effects of Losing Autonomous Monetary Policy after the Euro Adoption in Poland

Poland's Exceptional Performance During the World Economic Crisis: New Growth Accounting Evidence

The business cycle implications of the euro adoption in Poland