List of issues

Contents of issue 1/2015

Marek Lubiński - The Fiscal Multiplier Reloaded, abstract, article

Andrzej T. Szablewski - Should Poland Press Ahead with Nuclear Power?, abstract, article

Jakub Boratyński - The Economic Impact of Shale Gas, abstract, article

Marcin Komor, Jan H. Schumann - Cross-Cultural Differences Between Poland and Germany in Light of Cultural Dimensions Theory, abstract, article

Ewa Cichowicz, Agnieszka K. Nowak - Operational Risk Management in Selected Banks in Poland, abstract, article

Marcin Wieczerzycki - Digital Goods Under the Qualitative Theory of Information and Hylomporhism Theory, abstract, article

Tomasz Dorożyński, Janusz Świerkocki, Wojciech Urbaniak - Incentives for Attracting FDI: The Case of the Lodz Region, abstract, article


Book Review: Łukasz Hardt, Studia z realistycznej filozofii ekonomii (Studies in Realistic Philosophy of Economics), Wydawnictwo C. H. Beck, Warsaw 2013, 177 pp. - reviewed by Andrzej Czyżewski

Book Review: Maciej Malaczewski, Zasoby naturalne, postęp techniczny a długookresowy wzrost gospodarczy (Natural Resources, Technological Progress, and Sustainable Economic Growth), Wydawnictwo Uniwersytetu Łódzkiego, Łódź 2013, 138 pp. - reviewed by Krzysztof Malaga

Book Review: Piotr Pysz, Anna Grabska, Michał Moszyński (eds.), Ład gospodarczy a współczesna ekonomia (Economic Governance and the Modern Economy), Polskie Wydawnictwo Naukowe, Warsaw 2014, 286 pp. - reviewed by Adam P. Balcerzak

Marek Lubiński - The Fiscal Multiplier Reloaded

The article addresses a long-standing debate among economists over what is known as the fiscal multiplier effect. The author reviews a body of recent theoretical and empirical literature on the subject.
The latest global financial crisis has led to a renewed interest in the role of discretionary fiscal stimuli, Lubiński says. He adds that the need for fiscal expansion was particularly acute because monetary policy had driven nominal short-term interest rates down to zero without heading off the contraction.
Advocates of discretionary measures argue that government spending can stimulate additional private spending, producing the Keynesian multiplier effect, the author notes. Much of the recent economic debate on the impact of stimulus packages has focused on the size of the government fiscal multiplier, according to Lubiński.
Government spending multipliers in the empirically-estimated and widely-cited new Keynesian model are much smaller than in old Keynesian models, the author says. Because of uncertainty, he adds, it is essential that policy evaluations are robust to alternative assumptions. Studies suggest that fiscal multipliers are typically positive but small, and while there is some evidence of negative fiscal multipliers, there is no clear consensus on the preconditions for such an outcome. The impact of government expenditure shocks depends crucially on key country characteristics, such as the level of capacity utilization, the exchange rate regime, openness to trade, public indebtedness, household behavior, and the crowding-out effect. Moreover, the effects of fiscal packages are nonlinear, Lubiński notes. As a result, the fiscal multiplier is an uncertain guideline for stabilization policy, the author concludes.

Keywords: stabilization policy, fiscal multiplier, Great Depression
JEL classification codes: E32, E62, E63
Article: PDF

Andrzej T. Szablewski - Should Poland Press Ahead with Nuclear Power?

The article focuses on an ongoing debate on whether or not Poland should go ahead with its plan to develop a nuclear power program. The author questions the government’s analyses of the cost-effectiveness of such a program. According to Szablewski, the government has failed to take into account the implications of power sector liberalization in its estimates. Moreover, the author says that, despite the steadily growing costs of nuclear power plant construction in real terms, the government mistakenly assumes that each new plant in Poland will cost less to build than previous facilities. Finally, Szablewski argues that the government has ignored various types of risks faced by developers.
Therefore, analyses of the economic implications of nuclear power development should focus not on the future costs of nuclear power but on the construction costs at hand, according to Szablewski, especially as the cost-effectiveness of different future technologies for producing electricity is uncertain.
The article refers to an ongoing animated debate on factors that determined the development of nuclear energy in the past and on the prospects for developing nuclear power plants in the future. The author concludes that there is no economic justification for building new nuclear plants in countries with liberalized power sectors. This especially applies to countries that are still thinking of building their first nuclear plants, Szablewski says, as well as those, like Poland, that have already decided to press ahead with nuclear power.

Keywords: nuclear energy, energy liberalization, risk of “new build,” new electricity technologies
JEL classification codes: D24, L51, L52
Article: PDF

Jakub Boratyński - The Economic Impact of Shale Gas

The paper examines the economic impact of shale gas extraction. It also discusses the methodological approaches and tools used in studies in this area.
The article is based on a literature review that focuses on identifying the key mechanisms determining the impact of shale gas on an economy. The reviewed studies vary in terms of methodology, territorial scope, range of effects considered, and time frame. Some authors emphasize output and employment growth as the main result of extraction and investment processes, Boratyński says, while others recommend a more comprehensive cost-benefit analysis, focusing on economic efficiency and decreased energy prices as the most important effect. Research reports also highlight the importance of externalities related to the potentially negative impact on the environment and health, especially at the local level, Boratyński notes. Valuation of external costs, however, is subject to significant practical difficulties and uncertainty, according to the author.
The assessment of shale gas impact is usually based on simulations using a multi-sector economic model, an energy system model, or a hybrid of the two, Boratyński says. He adds that attempts at empirical ex-post estimation of such an impact raise questions about the validity of assumptions used in some simulation analyses.

Keywords: shale gas, economic impact, economic models
JEL classification codes: Q32, Q33, Q43, D61, D62, C60, C67, C68
Article: PDF

Marcin Komor, Jan H. Schumann - Cross-Cultural Differences Between Poland and Germany in Light of Cultural Dimensions Theory

The paper aims to determine the cultural differences between Poland and Germany on the basis of cultural dimensions theory proposed by Dutch social psychologist Geert Hofstede.
The authors conduct an empirical study using a uniform survey questionnaire and compare their findings against the pattern of cultural values established by Hofstede.The research focuses on cultural diversity. The original study conducted by Hofstede at the IBM corporation in the 1960 s and the 1970 s identified four cultural dimensions in several dozen countries, including Germany. The value scores for Poland’s cultural dimensions estimated by Hofstede were based on research carried out by other authors in the 1990 s. Komor and Schumann set out to determine the current cultural dimensions for Poland and Germany with a view to identifying the differences between the two nations.
The authors discuss the theoretical and methodological background of their study and provide a detailed explanation of the research problem. They also discuss the procedures underlying their empirical research based on a Cultural Value Scale (CVScale) validated by other researches.
The research indicates that there are relatively small differences in terms of cultural dimensions between Poland and Germany, the authors conclude. The greatest differences involve two dimensions: uncertainty avoidance and individualism/collectivism. A comparison of the results of the study with the index scores calculated by Hofstede points to differences in cultural values. According to Komor and Schumann, the results of their study can be used in business practice and future cross-cultural research.

Keywords: cross-cultural research, Geert Hofstede, cultural dimensions, internationalization, intercultural management, Cultural Value Scale
JEL classification codes: Z19, D12, Z10
Article: PDF

Ewa Cichowicz, Agnieszka K. Nowak - Operational Risk Management in Selected Banks in Poland

The article addresses the growing importance of operational risk and effective risk management in financial institutions. The authors aim to establish whether or not bank managers are aware of the existence of operational risk and how they manage this kind of risk.
The authors conduct a comparative analysis of operational risk and risk management in 10 selected banks in Poland. Data for the analysis comes from the banks’ financial statements for 2013.
On the basis of their study, the authors conclude that all the banks were aware of their exposure to operational risk, and they also realized that such risk could not be eliminated completely. Another conclusion is that banks tend to identify operational risk in line with the recommendations of the Basel Committee on Banking Supervision, the primary global standard-setter for the prudential regulation of banks.
According to Cichowicz and Nowak, banks are also aware of the urgency of risk management and recognize the need for consistent improvement of process management and monitoring methods. Moreover, banks are aware of the need to regularly update their databases of operational risk events, and they also make efforts to systematically validate their capital requirement models, the authors say.

Keywords: banking risk, operational risk, banks, risk management, Basel Committee on Banking Supervision, capital requirement
JEL classification codes: G21, G32
Article: PDF

Marcin Wieczerzycki - Digital Goods Under the Qualitative Theory of Information and Hylomporhism Theory

The paper seeks to identify the key characteristics of digital goods, or goods – such as digital images, music files and e-books – that exist in digital form and are shipped to the consumer through e-mail or via the internet.
The authors start out by carrying out an ontological analysis based on literature studies in different fields, including economics, information theory and philosophy. The two main concepts used in the research are Polish engineer Józef Kossecki’s general qualitative theory of information and Aristotle’s theory of hylomporhism.
The paper introduces a distinction between two kinds of digital goods: pure digital goods and converted digital goods. Pure digital goods consist of two levels, the author says, the digital original and the file embedded within the medium. Converted digital goods consist of four levels: the form, the physical original, the digital image, and the file embedded within the medium.
Digital goods vary between the different levels and have a specific cost structure, Wieczerzycki says. The producer pays the fixed cost related to the production of digital goods as well as the cost of network infrastructure needed for distribution. The consumer, on the other hand, covers variable costs related to the creation of copies of files embedded within a medium.

Keywords: information, digital goods, pure digital goods, converted digital goods, Józef Kossecki, general qualitative theory of information, Aristotle, theory of hylomporhis
JEL classification codes: M31, H42, H87, D83
Article: PDF

Tomasz Dorożyński, Janusz Świerkocki, Wojciech Urbaniak - Incentives for Attracting FDI: The Case of the Lodz Region

The paper studies the role of incentives provided by local government units (LGUs) in attracting foreign direct investment (FDI) to Poland’s Lodz province. The authors draw conclusions based on the results of a direct study using two types of questionnaires, one for foreign investors in the province and the other for LGUs. To ensure the accuracy of the study, the authors conducted an array of statistical surveys and tests.
The eta correlation coefficient was among the most important measures, the authors say.
It was used to assess the relationship between the inflow of FDI to Lodz province and the investment incentives offered by local government. The method helped verify a hypothesis concerning the significance of statistical relationships between the analyzed variables.
The obtained results demonstrate that most LGUs were interested in attracting investors, both Polish and foreign, the authors note. Incentives targeted exclusively at foreign investors were rare, according to the authors. Financial incentives were offered by only 7% of the districts and counties. Tax relief and allowances in property fees and local charges were the most popular types of financial incentives. Many LGUs resorted to various promotional methods.
The results of the study show that investment incentives were of secondary importance to the inflow of FDI to Lodz province, the authors conclude. Nor was this kind of support a key factor behind the decisions of foreign investors to continue operating in the region.

Keywords: FDI, incentives, Lodz province, local government
JEL classification codes: F21, R11
Article: PDF

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