Contents of issue 3/2015
Adam Karbowski - Cartels from Three Perspectives: Neoclassical, Behavioral and Ethical, abstract
Katarzyna Filipowicz, Tomasz Tokarski, Mariusz Trojak - The Golden Rules of Capital Accumulation in the Gravity Model of Economic Growth, abstract
Marek A. Dąbrowski - The Quality of Data on Foreign Exchange Reserves and Its Impact on Financial Crises in Emerging Market Economies, abstract
Jan Fałkowski, Katarzyna Metelska-Szaniawska - Countries’ Constitutions Viewed from an Economic Perspective: Why They Are Enacted and How Stable They Are, abstract
Dorota Janiszewska - The Social Market Economy Concept According to Alfred Müller-Armack, abstract
Paweł Felis - The Area-Based Property Tax System and Its Fiscal and Social Functions: Evidence from Polish Municipalities, abstract
Łukasz Goczek, Bartosz Witkowski - Card Payments in Poland: Determinants and Prospects, abstract
Book Review: Krystyna Gawlikowska-Hueckel, Jacek Szlachta (eds.), Wrażliwość polskich regionów na wyzwania współczesnej gospodarki. Implikacje dla polityki rozwoju regionalnego
(How Poland’s Regions Respond to the Challenges of the Modern Economy: Implications for Regional Development), Wolters Kluwer SA, Warsaw 2014, 374 pp. - reviewed by Tadeusz Kudłacz
Book Review: Kazimierz Kuciński (ed.), Ryzyko lokalizacji przedsiębiorstw w Polsce
(Business Risk in Poland), CeDeWu Sp. z o.o., Warsaw 2014, 224 pp. - reviewed by Anna Rutkowska-Gurak
Adam Karbowski - Cartels from Three Perspectives: Neoclassical, Behavioral and Ethical
The paper investigates cartels, or agreements between competing firms that seek to influence prices for certain goods and services by controlling production and marketing. The author examines the neoclassical approach to cartels and proposes two additional approaches, behavioral and ethical, to expand existing research on cartels.Most mainstream studies tend to approach cartels from a neoclassical perspective, according to the author. This research approach gave rise to the so-called optimal deterrence theory, which has become the basis for antitrust policy in highly developed countries, Karbowski notes. The optimal deterrence theory is a point of reference for Karbowski in his article. He compares the optimal deterrence theory with the results of behavioral analyses and ethical reasoning focusing on cartels.
According to the author, a behavioral approach makes it possible to show how the behavior of firms deviates from the path delineated by the standard optimal deterrence theory, based on assumptions of full rationality, perfect egoism and complete self-control of decision makers. These behavioral deviations can be explained by either internal (trait-based) or external (environmental) factors, Karbowski says. Ethical analysis makes it possible to expand the neoclassical approach to cartels by showing that cartel behavior can be viewed not only in pure economic terms, but also in terms of theft, deception and cheating, the author argues.Keywords
: cartels, neoclassical economics, behavioral economics, business ethicsJEL classification codes
: A13, B13, B21, D03, K21, L11Article
Katarzyna Filipowicz, Tomasz Tokarski, Mariusz Trojak - The Golden Rules of Capital Accumulation in the Gravity Model of Economic Growth
The paper seeks to determine the so-called golden rules of capital accumulation in a model of economic growth known as the gravity model. This model combines Solow’s neo-classical model of economic growth with what is defined as the gravity effect.
The authors consider two variants of the gravity model. The first variant seeks such a level of investment rates that would maximize the geometric average of consumption per employee in all economies, under the assumption of a long-term equilibrium. The second variant seeks such a level of investment rates that would maximize long-term consumption per employee in each economy.
The research shows that, in both variants, optimum investment rates depend on the elasticity of production with regard to capital and on the gravity effect, the authors say. In the second variant, the optimum investment rates additionally depend on the number of economies included in the model. If the number of economies subject to the gravity effect increases, investment rates decrease in each economy, the authors say.
In both variants, the gravity effect peters out and is eventually reduced to zero, but tends to have the same form as the original golden rules of capital accumulation posited by Edmund Phelps, the authors argue. They add that the golden rules of accumulation determined in the article are a generalization of Phelps’ original golden rules of capital accumulation under the assumption of the existence of a gravity effect.Keywords
: gravity model, golden rules of capital accumulation, economic growth, gravity effectJEL classification codes
: C02, R11, E23, O47Article
Marek A. Dąbrowski - The Quality of Data on Foreign Exchange Reserves and Its Impact on Financial Crises in Emerging Market Economies
The paper examines the definition of foreign exchange reserves and related concepts. It also investigates to what extent the transparency and completeness of foreign exchange reserve data affected the course of financial crises in emerging market economies in the 1990 s. The author looks at how the practice of reserve data dissemination changed in the wake of these crises.
Three case studies of crises in Mexico, Thailand and South Korea show that conventional measures of foreign exchange reserves provide a partial and sometimes misleading picture of economic conditions, Dąbrowski says. According to the author, this enables decision makers to postpone costly decisions and contributes to the risk of sudden reactions on financial markets.
Financial crises have induced emerging market economies to substantially accumulate foreign exchange reserves and rearrange their policies on macroeconomic data dissemination by bringing them in line with IMF guidelines, the author argues. Under these guidelines, monetary authorities are required to publish data on gross reserves and on pre-determined and contingent net drains on foreign currency assets. This ensures a comprehensive picture of foreign currency liquidity and resilience to external shocks, Dąbrowski concludes.Keywords
: foreign exchange reserves, foreign currency liquidity, financial crisis, emerging market economyJEL classification codes
: F31, F41, E65Article
Jan Fałkowski, Katarzyna Metelska-Szaniawska - Countries’ Constitutions Viewed from an Economic Perspective: Why They Are Enacted and How Stable They Are
Based on recent literature on the subject, the article investigates why countries need constitutions and how constitutions influence economies. The authors look at how lasting national constitutions are and why they are amended. The analysis is based on approaches including Constitutional Economics, New Political Economy, and Law and Economics. The authors reach for explanations related to property rights economics, interest group theory, and analysis of the distribution of political power between various groups of society. The study identifies the primary factors shaping the process of establishing constitutional rules and their stability. It also highlights four channels through which constitutions influence economies. In particular, the authors focus on: (1) the constitution’s role in enhancing the credible commitments of political elites, (2) its significance for political stability within the state, (3) the functioning of interest groups benefiting from various constitutional provisions, and (4) transaction costs that various actors bear because of the necessity to adjust to the enforced rules or attempts to evade them.
The authors formulate conclusions that they say could contribute to further research on the potential substitutability and complementarity of constitutional rules and to studies focusing on the issue of endogenizing constitutions.Keywords
: constitutional economics, new political economy, constitution, economic analysis of law, endogenous institutionsJEL classification codes
: D02, D72, H11, K19, P48Article
Dorota Janiszewska - The Social Market Economy Concept According to Alfred Müller-Armack
The article focuses on the social market economy (Soziale Marktwirtschaft) theory developed by German economist Alfred Müller-Armack (1901-1978). The author analyzes Müller-Armack’s ideas in the context of socioeconomic developments in West Germany after World War II.
The article outlines Müller-Armack’s diagnosis of society in 20th-century Europe and his criticism of laissez-faire capitalism and collectivism.
Müller-Armack pursued ideas of social humanism and what is termed “social irenics,” a notion of working toward peace, moderation and conciliation in order to overcome existing differences in society. His idea of social market economy is seen as a holistic concept pursuing a complete humanistic societal order and a synthesis of seemingly conflicting objectives: economic freedom and social security.
Müller-Armack’s social market economy concept called for a return to the market and competition, combined with an active economic policy and a social security system. The concept addressed the question of reconciling economic growth with freedom and social security. Janiszewska’s article highlights the cognitive value of the social market economy concept and its relevance to contemporary discourse on how economic systems should develop.Keywords
: social market economy, economic policy, economic system, economic crisis, ordoliberalismJEL classification codes
: B20, N34, P16Article
Paweł Felis - The Area-Based Property Tax System and Its Fiscal and Social Functions: Evidence from Polish Municipalities
The article evaluates the area-based property tax system in Poland in terms of its macroeconomic fiscal effectiveness and social function. The author analyzes what this tax system means to taxpayers and public finances.
The author uses several research methods, including descriptive statistics, literature review, and legal analysis combined with a descriptive and comparative study of property tax systems.
The article concludes that the Polish property tax system is in need of radical reform. According to the author, it is outdated and inflexible and does a poor job meeting its fiscal and non-fiscal objectives. Felis recommends that a new, more efficient property tax system be introduced, one that would help achieve the social objectives of municipalities, while being fair and acceptable for taxpayers. The best solution would be a system based on the value of property, Felis says. When building such a system, he adds, it is important to take into consideration municipality incomes and the relationship between national and local taxes.Keywords
: municipality incomes, local tax, real estate tax, area-based and value-based property tax systemsJEL classification codes
: H21, H24, H71, K34Article
Łukasz Goczek, Bartosz Witkowski - Card Payments in Poland: Determinants and Prospects
The paper examines Poland’s card payment market. It analyzes the determinants of card transactions and makes projections for the development of this market from 2015 to 2017.
Studies point to a strong relationship between the development of cashless transactions and the rate of economic growth recorded by countries, the authors say. The article seeks to identify the key factors driving the card payment market, such as the number and value of card transactions, the number of cards held by individuals, and the number of electronic-funds-transfer-at-point-of-sale (EFTPOS) terminals.
The authors build models based on panel data from European Union countries from 2000-2012. They use Blundell and Bond’s system-GMM estimator to treat the results in terms of causality rather than coexistence of the obtained effects.
The role of trust in society and GDP growth are found to be important determinants of the development of the cashless transactions market. The authors’ projections suggest that Poland’s cashless transactions market will develop rapidly in the years ahead even if economic growth is slower than projected.Keywords
: card payments, non-cash transactions, retail paymentsJEL classification codes
: E42, E58Article