Polish Stabilization: What can we learn from the I(2) Cointegration Analysis?

This paper investigates an array of nominal systems for the Polish economy, of domestic price level, import prices, exchange rates, money stock, nominal wages, and real output, and conducts I(1) and I(2) cointegration analyses. Post-stabilization monthly data are used, 1991:5-1999:12. A test for the...

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Bibliographic Details
Published inEconomic change and restructuring Vol. 36; no. 2; p. 177
Main Author Vostroknutova, Ekaterina
Format Journal Article
LanguageEnglish
Published Dordrecht Springer Nature B.V 01.04.2003
Subjects
Cointegration analysis
Economic models
Economic stabilization
Economic theory
Foreign exchange rates
Hypotheses
Inflation
International organizations
Investigations
Labor market
Liberalization
Monetary policy
Prices
Studies
Transition economies
Wages & salaries
Poland
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Summary:This paper investigates an array of nominal systems for the Polish economy, of domestic price level, import prices, exchange rates, money stock, nominal wages, and real output, and conducts I(1) and I(2) cointegration analyses. Post-stabilization monthly data are used, 1991:5-1999:12. A test for the presence of a price-wage spiral is performed, and the stabilization package is compared to its realization. The long-run homogeneity hypothesis, the impact of monetary and incomes policies, and of external sector variables on long and medium run price development are studied. It is found that in Poland, contrary to some earlier studies, the external sector is not important for the long run price development. On the contrary, very strong evidence is found of the cost-push inflation. [PUBLICATION ABSTRACT]
ISSN:1573-9414
1574-0277