List of issues

Contents of issue 10/2012

Janusz Sawicki - Preserving EMU Depends on Success of ESM in Solving the Debt Crisis, abstract, article

Tymon Słoczyński - Using the Equal Sacrifice Principle to Test the Fairness of Poland’s Personal Income Tax System, abstract, article

Łukasz Goczek - Econometric Methods in Economic Growth Models, abstract, article

Andrzej Jędruchniewicz - Production in the Expansion Phase of the Business Cycle in Poland, abstract, article

Waldemar Florczak - Institutional Determinants of Crime in Poland, abstract, article


Book Review: Bogumiła Mucha-Leszko (ed.), Gospodarka i polityka makroekonomiczna strefy euro w latach 2008-2010. Skutki kryzysu i słabości zarządzania (The Eurozone Economy and Macroeconomic Policy from 2008 to 2010: The Implications of the Crisis and Management Flaws), Wydawnictwo UMCS, Lublin 2011, 262 pp. - reviewed by Marek Lubiński

Book Review: Grażyna Bartkowiak, Społeczna odpowiedzialność biznesu w aspekcie teoretycznym i empirycznym (Corporate Social Responsibility: Theoretical and Empirical Aspects), Difin, Warsaw 2011, 238 pp. - reviewed by Katarzyna Bachnik

Janusz Sawicki - Preserving EMU Depends on Success of ESM in Solving the Debt Crisis

The paper presents a systemic explanation of the ongoing debt crisis in the European Monetary Union (EMU). The way monetary policy has been conducted in the eurozone as well as ineffective management of both public and private debt created a systemic risk that in 2010 turned into a full-fledged debt crisis. The author’s analysis of past EMU data, official internal and external forecasts and the way that debt negotiations have proceeded yield a number of conclusions. One of these is that the European Stability Mechanism (ESM) and the European Central Bank (ECB) are in a position to stabilize the debt situation for some time if they are flexible in their approach. However, this requires extensive cooperation between peripheral and central countries as well as within these groups.
This condition is necessary but not sufficient to stabilize the EMU, the author says. As most of the EMU countries are heavily indebted (a situation that applies to both the public and private sectors), a new system of financial regulations must be hammered out, along with instruments to allow the peripheral countries to grow out of their debt problems. That will not happen without a partial debt reduction and external assistance, the author says, as the heavily indebted economies will not be able to adjust, because of economic as well as political factors. As in all past debt negotiations, conditionality, comparability of treatment and moral hazard problems will play a role, the author concludes.

Keywords: debt, debt management, financial sustainability, EMU, ESM
JEL classification codes: F34, G15, G18, H63, H68
Article: PDF

Tymon Słoczyński - Using the Equal Sacrifice Principle to Test the Fairness of Poland’s Personal Income Tax System

The aim of the paper is to perform an empirical analysis of the compatibility of the Polish personal income tax (PIT) function with the equal absolute sacrifice principle, which is a major principle of a fair division of tax burden. Throughout the empirical analysis, the author uses analytical methods proposed by Fisher (1927) and Young (1990). The Fisher method is based on calculating the variation in individual sacrifice according to an assumed utility function of income. The Young method is based on selecting the isoelastic utility function of income, which makes all taxpayers sacrifice most equally. Subsequently, a new tax function is determined, which guarantees equal absolute sacrifice according to the selected utility function of income, and compared with the actual tax function. The empirical analysis carried out by the author shows that the Polish personal income tax (PIT) function in 1999-2008 provided a good fit with the equal absolute sacrifice principle, while the sacrifice of most taxpayers was equalized according to reasonable utility functions.
However, the author identified three groups of taxpayers whose sacrifice was significantly lower than required by the equal absolute sacrifice principle as well as described the time variation in the compatibility of the Polish tax function with the equal absolute sacrifice principle and in the progressivity of this function.

Keywords: distributive justice, fair division, equal sacrifice principle, inequality aversion, personal income tax (PIT)
JEL classification codes: D63, H23, H24
Article: PDF

Łukasz Goczek - Econometric Methods in Economic Growth Models

The article aims to review and assess different econometric methods used in the estimation of empirical models of economic growth. Such models play an important role in the economy because they yield conclusions for policymakers, the author says. His research showed that the preferred method for the estimation of dynamic models of growth based on cross-temporal data is the Generalized Method of Moments applied simultaneously on the levels and first differences with error correction used in small samples. However, in some cases, more accurate estimates could be obtained by using either the Kiviet or Pooled Mean Group (PMG) estimator instead of the Generalized Method of Moments, the author concludes.

Keywords: economic growth, empirical models, econometric methods, convergence
JEL classification codes: O40, O47, C23, C52
Article: PDF

Andrzej Jędruchniewicz - Production in the Expansion Phase of the Business Cycle in Poland

The article aims to validate two hypotheses underlying the so-called Austrian Business Cycle Theory. The first hypothesis is that an expansive monetary policy lengthens the production process and increases the time it takes for consumer goods to be produced. The second hypothesis is that interest rate cuts lead to relative differences in the growth of production in industries manufacturing goods in different temporal distances from the consumer.
The research methods used in the article are consistent with the methodological approach of the Austrian Business Cycle Theory. The author uses a deduction method based on applying verbal logic in the analysis of the sequence of economic processes. The article also uses a comparative method in the analysis of dynamic changes in the examined values.
The research carried out by the author validated both hypotheses. The analysis based on the adopted indicators showed that production of consumer goods was lengthened in Poland between the third quarter of 2002 and the second quarter of 2008, a period when the Juglar cycle was in its growth phase. The same was true of some shorter expansion phases of the business cycle, the author says. The analysis also showed that, after Poland’s central bank (NBP) cut interest rates, production of goods most distant from the consumer and of durable goods grew faster than production of goods closer to the end consumer.

Keywords: business cycle, capital, monetary policy, lengthening/widening of production structure
JEL classification codes: E01, E23, E32, E43
Article: PDF

Waldemar Florczak - Institutional Determinants of Crime in Poland

The article articulates the need for empirical studies of crime using economic research methods. The author aims to encourage Polish economists to look at crime as a potential research topic, in line with a global trend. The article focuses on the key aspects of the economic theory of crime. Under this theory, the institutional determinants of crime, including the law enforcement system, play not only an essentially passive, accommodative function but also an active, preventive function. The latter function is directly linked with the so-called deterrence theory, which highlights issues related to the functioning of the law enforcement system because each component of this system generates a different aspect of the overall deterrence effect.
The article discusses the reasons why crime should be the subject of economic research. These include the economic theory of crime and the deterrence theory as well as the social costs of crime and the functioning of the law enforcement system. The author also takes a position on the possibility of conducting empirical research using crime data. Referring to the existing data, he analyzes selected aspects of the functioning of the Polish law enforcement system, with a special emphasis on the prison system.
The findings of the article could be useful for all those interested in the practical aspects of measuring and modeling crime by using economic analysis, the author says.

Keywords: economic theory of crime, deterrence theory, institutional determinants of crime, social costs, law enforcement system
JEL classification codes: E60, E61, K14, K42
Article: PDF

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