Contents of issue 7-8/2009
Jerzy Osiatyński - Poland’s Macroeconomic Strategy at a Time of Global Crisis, summary
Maciej K. Dudek - Demand-Side Shocks and Macroeconomic Policy, summary
Leszek Morawski - The Effects of Introducing Two Personal Income Tax Rates in 2009, summary
Ewa Grzegorzewska-Ramocka - The Social and Economic Goals of Business Organizations, summary
Milena Ratajczak-Mrozek - Business Networks Versus Other Concepts of Cooperation Between Enterprises, summary
Mieczysław Kowerski - Business Cycle Fluctuations in Poland’s Lublin Region, summary
, articleCONFRENCES - POLEMICS - REVIEWS
Seasonal Employment in Enterprises Active in the Tourism Sector: Research Conclusions - Wanda Karpińska-Mizielińska, Tadeusz Smuga
Book Review: Jerzy Hausner, Pętle rozwoju. O polityce gospodarczej lat 2001-2005
(A Development Loop: On the Economic Policy of the 2001-2005 Period), Wydawnictwo Naukowe SCHOLAR, Warsaw 2007, 233 pp. - reviewed by Piotr Ważniewski
Book Review: Tomasz Gołębiowski, Teresa Magdalena Dudzik, Małgorzata Lewandowska, Marzanna Witek-Hajduk, Modele biznesu polskich przedsiębiorstw
(Business Models in Poland’s Corporate Sector), Oficyna Wydawnicza Szkoły Głównej Handlowej, Warsaw 2008, 348 pp. - reviewed by Marian Gorynia
Central and Eastern European Countries’ Response to the Global Economic Crisis - Tadeusz Smuga
Jerzy Osiatyński - Poland’s Macroeconomic Strategy at a Time of Global Crisis
Different countries have applied different policies to deal with the latest economic crisis that has struck the world. While Poland and other new member states of the European Union have tightened their fiscal policies and resorted to various supply-side instruments, the United States, Japan and many old EU member countries have employed a fiscal expansion policy. This policy is based on a GDP growth multiplier effect and an increased use of public debt to finance government expenditure. The author estimates a potential fiscal impulse multiplier for the Polish economy in 2008 and follows up with a discussion of the key arguments of critics and advocates of the fiscal expansion strategy.
In new EU member states, the ratio of the current-account deficit to GDP and the ratio of foreign debt to GDP are the main factors that determine whether or not there is room for fiscal expansion in the economy, the author says. In the wake of the global financial crisis, these ratios increased dramatically in these countries, chiefly due to previously underestimated system risks. Those risks resulted from the fact that new EU member countries maintained their interest rates at a high level for many years to keep inflation in check. The difference between the domestic and foreign interest rates was largely responsible for a progressive appreciation of the exchange rate, accompanied by a decreased competitiveness of exporters, increased foreign debt of businesses and households, and growing reliance on foreign investment as a way of covering the trade deficit. All these risks materialized when the international financial crisis began.
The paper aims to determine if there is room for a fiscal expansion policy in Poland and whether such a policy could lead to a major increase in Treasury security yields and higher public debt service costs. This question requires detailed calculations, Osiatyński says. Even though the 2009 budget deficit was 121 percent financed from domestic sources in the first five months of the year, the policy produced no major increase in Treasury security yields, which may mean that there is room for such a policy in Poland, Osiatyński concludes. Otherwise the country could face a prolonged period of economic stagnation, he adds.Keywords
: global economic crisis, fiscal expansion, fiscal tightening, government expenditure multiplier, budget deficit, public debt, foreign debtArticle
Maciej K. Dudek - Demand-Side Shocks and Macroeconomic Policy
The paper focuses on short run macroeconomic dynamics triggered by dem and side shocks. In particular, the paper analyzes, in a general equilibrium framework, the impact of transitory demand side shocks on the behavior of macroeconomic variables and examines the relevance of policy instruments during downturns in economics activity. The paper establishes that transitory shocks can have persistent effects. It shows that stabilization is desirable even if shocks are transitory in nature. In particular, the article reveals that debt financed government spending is a diable stabilization tool and can improve welfare at all horizons even though it inhibits physical capital formation.Keywords
: Business Cycles, Policy, Debt, Welfare CostsArticle
Leszek Morawski - The Effects of Introducing Two Personal Income Tax Rates in 2009
Three important income reforms have been carried out in Poland since 2007, involving a reduction in social insurance premiums, the introduction of a tax break for families with children, and the replacement of three personal income rates (19%, 30% and 40%) with two rates (18% and 32%). Morawski uses a tax-benefit microsimulation model (SIMPL) and household budget data from 2006 to examine the results of the 2009 income reform.
By comparing two hypothetical breakdowns of disposable household incomes, the author shows that the reform has primarily benefited the wealthiest households, while the incomes of many poor households have not changed. In all, the incomes of more than 15 percent of the households have not changed after the reform, Morawski says. At the same time, analyses show that the reform has benefited many single-member and pensioner households which did not benefit from previous reforms.
The results described in the paper were obtained with the assumption that the supply of labor would not change. Labor market analyses show that such an assumption is justified in the case of the 2009 tax reform, the author says.Keywords
: personal income tax, tax rates, households, tax-benefit microsimulation modelArticle
Ewa Grzegorzewska-Ramocka - The Social and Economic Goals of Business Organizations
The paper looks at the strategies of Polish businesses to determine if these companies are interested in helping solve social problems in their community.
The author assumes that a business organization is an integral part of a social development model in which consumers are seen not only as a market but also as a community that builds democracy. Consequently, enterprises should follow rules that help maintain the socioeconomic order in the community and follow shared values, the author says. This means that enterprises should not harm society while pursuing profit.
The moral responsibility of individuals for their economic decisions becomes a fundamental component of corporate social responsibility, according to Grzegorzewska-Ramocka. While making business decisions, entrepreneurs must follow certain legal, ethical, moral and social standards. They should not limit themselves to choosing between profit and risk, the author says, but their main aim should be to replace profit maximization with the maximization of the company’s market value.
According to the author, every company can contribute to the idea of corporate social responsibility by helping its local community.
Corporate social responsibility (CSR) means operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. CSR is a commitment for businesses to behave ethically and contribute to economic development while improving the quality of life of the work force and their families as well as the local community at large. CSR means that a business organization takes responsibility for the impact of its activities on its employees, customers, the community, and the environment.Keywords
: enterprise, corporate social responsibility, before-profit obligation, after-profit obligation, maximization of the market value of a firmArticle
Milena Ratajczak-Mrozek - Business Networks Versus Other Concepts of Cooperation Between Enterprises
The paper is concerned with the notion of a business network and compares this form of ties between businesses with other forms of cooperation in the corporate sector.
The paper is predominately theoretical in nature. The analysis was carried out from the perspective of what is known as a network approach. In addition, an example of a business network was described.
A business network is defined as a set of relations connecting two or more entities characterized by continuous interaction, with a great significance of informal contacts and interdependence in the area of resources, entities and activities.
In research reports on the subject, many forms of ties among businesses are linked with the idea of a business network. These include business clusters, virtual organizations, supply chains, logistics networks, and strategic alliances. The author discusses the differences between these forms of cooperation.
Practice shows that a business network can be any group of small to medium-sized businesses with common interests and goals. Companies within a business network collaborate with one another in order to pool their resources and capitalize on shared assets. Working together, the group members can take on projects that they might not have been able to manage individually.Keywords
: network approach, business networks, cooperationArticle
Mieczysław Kowerski - Business Cycle Fluctuations in Poland’s Lublin Region
The paper examines business cycles in Poland’s Lublin province using quarterly business sentiment indicators calculated since the second quarter of 2001. Both composite and sector indicators are calculated on the basis of the results of quarterly surveys covering 320 companies and 350 households. Sector indicators are calculated as weighted arithmetic means of respondents’ assessment of their current condition and forecasts for the next quarter. Composite indicators are weighted averages of sector indicators, with the shares of individual sectors in gross value added generated in the province used as weights.
Industry and construction in Lublin province began to slow down in the second quarter of 2007, according to Kowerski. By now the slowdown in these sectors has become evident. The slump in the service sector began in the first quarter of 2008, and consumers felt the downturn in the second quarter of 2008. The retail sector has yet to experience a downturn, according to Kowerski. The composite indicator of business sentiment began to deteriorate markedly in the second quarter of 2008.
The research shows that the economy of the Lublin region began to slow down in the first half of 2008, though it is unclear if this trend can be called a recession, the author says.Keywords
: Lublin region, business cycle, business sentiment, slowdown, recessionArticle