Changes in Final Demand Components and Their Potential Impact on the Polish Economy: An Analysis Based on the WM-1 Model
Aleksander Welfe 1  
Piotr Karp 1  
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Uniwersytet Łódzki, Katedra Modeli i Prognoz Ekonometrycznych
Publish date: 2018-12-20
Submission date: 2018-06-04
Acceptance date: 2018-10-17
Gospodarka Narodowa 2018;296(4):35–50
The WM-1 model is a unique macromodel that uses monthly data to describe the functioning of the Polish economy. This article presents the results of a stochastic simulation obtained with the model that demonstrates the potential impacts on the Polish economy of: (1) increasing/decreasing exports, (2) increasing/decreasing investment outlays, and (3) increasing household incomes. The simulation shows that various sources of shocks induce different responses from the economy, both in terms of their strength and the speed of adjustment. There are also distinct asymmetry effects in the reactions of economic entities. The Polish economy has been shown to be more vulnerable to negative shocks decelerating economic activity than to shocks stimulating economic growth.