List of issues

Contents of issue 11-12/2008

Andrzej Wojtyna - Monetary Policy in the Euro Area: Old Concerns, New Challenges, abstract, article

Waldemar Florczak - Effective Labor Supply and Economic Growth, abstract, article

Paweł Dykas, Anna Sulima, Tomasz Tokarski - The Golden Rules of Accumulation Under the N-Capital Economic Growth Model, abstract, article

Adam Adamczyk, Wojciech Jarecki - Evaluation of the Internal Rate of Return for Investment in Higher Education, abstract, article

Wirginia Doryń, Dorota Stachera - The Internationalization and Performance of Poland’s Largest Manufacturing Firms, abstract, article

Eulalia Skawińska, Tomasz Brzeczek - The Implications of Poland’s Planned Adoption of the Euro According to College Students, abstract, article


How Entrepreneurs View the Polish Labor Market - Urszula Kłosiewicz-Górecka

Book Review: Dani Rodrik, One Economics, Many Recipes: Globalization, Institutions and Economic Growth, Princeton University Press, Princeton and Oxford 2007, 263 pp. - reviewed by Tomasz Legiędź

Book Review: Andrzej Szablewski, Krzysztof Pniewski, Bohdan Bartoszewicz (eds.), Value Based Management. Koncepcje, narzędzia, przykłady (Value Based Management: Concepts, Tools, Examples), Poltext, Warsaw 2008, 712 pp. - reviewed by Andrzej Cwynar

Book Review: Włodzimierz Szpringer, Wojciech Rogowski (eds.), Ocena skutków regulacji - poradnik OSR, doświadczenia, perspektywy (Regulatory Impact Assessment: Guidelines, Experiences, Prospects), C.H.Beck, Warsaw 2007, 338 pp. - reviewed by Jacek Prokop

Public Sector in the Modern Economy - Marian Zalesko, Tadeusz Smuga

Index of Publications in 2008

Andrzej Wojtyna - Monetary Policy in the Euro Area: Old Concerns, New Challenges

The paper addresses some important dilemmas and factors determining the monetary policy of the European Central Bank (ECB). According to the author, in the coming years the ECB’s monetary policy will to a large extent depend on how the ongoing financial crisis affects Europe and the world at large. At this point, it is too early to offer an evaluation of how this policy may change, Wojtyna says.
The article attempts to answer a number of questions related to the ECB’s monetary policy. One question is whether or not an evaluation of the effects of the bank’s policy should take into account some general institutional frameworks. Second, did the ECB do the right thing adopting a specific strategy for its monetary policy? Third, to what extent has the Taylor rule proved to be useful in the assessment of the restrictiveness of the ECB’s monetary policy? The Taylor rule, proposed by U.S. economist John B. Taylor in 1993, is a rule that stipulates how much the central bank should change the nominal interest rate in response to divergences of actual GDP from potential GDP and of actual inflation rates from target inflation rates.
According to Wojtyna, the effects of the ECB’s policy should be clearly differentiated from the effects of the Economic and Monetary Union as a whole. Second, the notion of “ECB policy” is broader than the term “monetary policy” with regard to the European Central Bank, the author says. Third, it is necessary to draw a distinction between various types of monetary policy depending on their scope, Wojtyna notes.
The paper also discusses the latest research on the institutional environment of monetary policy and focuses on selected disputed issues involving the monetary policy strategy adopted by the ECB.

Keywords: monetary policy, euro area, European Central Bank, strategy, Taylor rule
Article: PDF

Waldemar Florczak - Effective Labor Supply and Economic Growth

The article discusses the relationship between effective labor supply—determined by factors that are linked either directly or indirectly with human capital—and sustained economic growth per capita. On the basis of an expanded Mincer wage equation, the author estimates effective labor supply, taking into account effects linked with human capital, and conducts an econometric analysis of changes in the average working time in Poland in 1970-2005.
The author zeroes in on long-term relationships and checks the results of his analysis against a body of statistical data. The diagnostic tools used by the author include the Gauss-Markov theorem, a method for evaluating statistical errors developed by mathematicians Carl Friedrich Gauss and Andrey Markov.
According to Florczak, standard labor supply analyses are often inaccurate because they overlook factors linked with working time, the quality of labor, and the overall social and demographic conditions. In an era of globalization, the author says, if it wants to maintain its international economic competitiveness, Poland should increase the role of “extensive” factors of production by boosting the economic activity of the population.

Keywords: effective labor supply, human capital, econometric model, Mincer wage equation, sustained economic growth, supply-side growth factors, demographic structure of the population
Article: PDF

Paweł Dykas, Anna Sulima, Tomasz Tokarski - The Golden Rules of Accumulation Under the N-Capital Economic Growth Model

The paper aims to theoretically determine the golden rules of capital accumulation—as defined by American economist Edmund S. Phelps—under the “N-capital” economic growth model based on a uniform macroeconomic production function, Ξ>0.
With Ξ=1, the macroeconomic production function discussed in the paper is characterized by constant scale effects (as in the case of neoclassical growth models developed by Solow, Mankiw, Romer, Weil, Nonneman, and Vanhoudt), the authors say, while with Ξ<1/Ξ>1 the scale effects of the production process decrease/increase.
The authors show that the growth model analyzed in the paper is characterized by asymptotic stability in a certain environment. The authors also examine the long-run growth paths of basic macroeconomic variables in the analyzed model and identify the golden rules of capital accumulation under the N-capital growth model when the production process leads to scale effects.

Keywords: golden rules of capital accumulation, Edmund S. Phelps, N-capital growth model, production function
Article: PDF

Adam Adamczyk, Wojciech Jarecki - Evaluation of the Internal Rate of Return for Investment in Higher Education

Surveys conducted in some of the world’s most developed countries have demonstrated that there is a positive relationship between the level of education and the level of income, Adamczyk and Jarecki write. According to the human capital theory, this effect is due to the growth of productivity. But education is also associated with costs. These costs can be divided into the direct costs of studying and opportunity costs. Thanks to the existence of measurable costs and effects, it is possible to assess the profitability of education.
In order to measure the effects of investment in higher education, under the human capital theory, it is necessary to use a function in which the dependent variable is the level of income and the independent variables are age, education, and professional experience.
However, this method cannot be used to determine whether or not studying is profitable, because it does not consider the costs of studying, Adamczyk and Jarecki note. They evaluate the profitability of investment in higher education in 2002, 2004 and 2006 using the internal rate of return (IRR) method.
The IRR method is commonly used to evaluate the profitability of companies’ long-term investments. It makes it possible to take into account not only the level of effects and costs, but also the moment when they appear. A key advantage of this method is that it makes it possible to compare the effectiveness of investment in education with other kinds of investments, the authors say.
The evaluation made by the authors showed that the rate of return was lower than 15 percent but higher than 16 percent, which means it was higher than the risk-free rate of return. In all, the obtained results show that investment in higher education in Poland is profitable.
The analysis also demonstrated that the profitability of investment in higher education depends on sex. Men can obtain a higher rate of return than women. Another conclusion is that the profitability of studying can be affected not only by the income level but also by its time distribution.

Keywords: internal rate of return, investment, higher education
Article: PDF

Wirginia Doryń, Dorota Stachera - The Internationalization and Performance of Poland’s Largest Manufacturing Firms

The paper aims to identify the effects of internationalization on firms’ financial performance.
Numerous empirical investigations have attempted to study the relationship between internationalization and firm performance, producing both monotonic and curvilinear findings. The paper uses a sample of Polish businesses from the 2005-2006 period based on an annual league table of Poland’s 500 largest companies ranked by Rzeczpospolita daily newspaper.
The dependent variable, firm performance, was measured using the return on assets. The key independent variable, the degree of internationalization, was measured by the ratio of foreign sales (exports) to total sales. The authors controlled for firm size, which was measured by the natural logarithm of total employment.
The econometric analysis of a cross-sectional data set of multinational firms yielded results that point to a non-monotonic relationship between the degree of internationalization and firm performance, Doryń and Stachera say. The study shows that there is a standard U-shaped curvilinear relationship between international diversification and firm performance. Polish firms initially suffer a decline in profits as they expand internationally, but over time, through gaining experience and through organizational learning, they begin to derive benefits from their international expansion and their performance improves.

Keywords: firm performance, internationalization, exports
Article: PDF

Eulalia Skawińska, Tomasz Brzeczek - The Implications of Poland’s Planned Adoption of the Euro According to College Students

Many researchers have analyzed the benefits and costs of the planned introduction of the single European currency in Poland. But the results of these analyses have varied, depending on whether they applied to the average consumer, especially in the short term, or the economy as a whole.
The paper looks at the concerns and hopes of Polish college students in the context of the planned adoption of the euro in Poland. Both full- and part-time students—representing a large and well-educated group of consumers—were asked about the costs and benefits of the move for Polish consumers.
The poll covered 446 students from five university-level schools in the western city of Poznań. The authors also examined the relationship between the respondents’ knowledge and their assessment of the plan to introduce the single European currency in Poland. The answers given by students in individual schools were compared and analyzed.
On the basis of their analysis the authors come up with a number of recommendations on how the government should pursue its social communication policy as far as the planned adoption of the euro in Poland is concerned. A clear position of the government is needed on the country’s preparations for adopting the euro and a concrete date of when this can happen, the authors say. It is necessary to tell the public about the benefits of introducing the euro, dispel unjustified worries involving issues such as price convergence, and counteract real threats posed by factors such as inflation stimulated by the conversion of prices and intensified economic emigration. Overall, the authors say, the analysis shows that the students are aware of the need for reforms in the Polish economy, especially with regard to the labor market.

Keywords: eurozone, benefits and costs of introducing the euro, consumer expectations, social communication
Article: PDF

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