AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
THE POLICY MIX IN THE CONTEXT OF THE COMPETITIVENESS OF THE POLISH ECONOMY
a
JOANNA STAWSKA,
b
LENA GRZESIAK
a
University of Lodz, 39 Rewolucji 1905 Street, Lodz, 90-214,
Poland
b
University of Lodz, 22/26 Jana Matejki Street, Lodz, 90-237,
Poland
email:
a
joanna.stawska@uni.lodz.pl,
b
lena.grzesiak@uni.lodz.pl
Acknowledgement: This work was supported by the Polish Ministry of Science and
Higher Education through research project for Young Researchers under the contract
no. B1711200001674.02.
Abstract: The aim of the article is to characterise selected macroeconomic indicators
from the policy mix area in the context of the competitiveness of the Polish economy.
In order to achieve this aim, the following research methods are used: a review of the
literature and statistical analysis method. The study includes an analysis of
macroeconomic data for the years 2000-2016 on the policy mix and the
competitiveness of the Polish economy. The results of the conducted analysis indicate
that in the discussed period there was a statistically significant correlation between
monetary and fiscal policy indicators in the background of improving indicators
measuring the competitiveness of the Polish economy.
Keywords: policy mix, competitiveness of economy, Polish economy
1. Introduction
Monetary policy and fiscal policy have instruments to adjust the
market mechanism. This combination is called policy mix.
1
Coordination of monetary policy and fiscal policy has special
importance in emergency (crisis) conditions, although it is
equally important in a stable economic situation of the country.
Policy mix is also a common topic of many works on state
strategies used to stimulate or stabilize
2
the economy and thus
"create" competitive conditions for economic development. As
Kuttner emphasizes, the combination in the IS-LM model is less
crucial, but the overall level of aggregate demand is important
and it can be shaped by fiscal policy, monetary policy or a
combination of both policies, monetary and fiscal ones.
3
Proper
monetary and fiscal policy conditions can have a significant
positive impact on the country's economic development, as it is
possible to stabilize and "improve" macroeconomic indicators.
These indicators can influence the competitiveness of a given
economy as a result of coordination of monetary and fiscal
policy. The coordination of both policies contributes to greater
stability of the financial system. Hence, the purpose of this
article is to characterize selected macroeconomic indicators from
the policy mix in the context of the competitiveness of the Polish
economy.
1.1 The competitiveness of economy
The term of competitiveness of economy is not an unambiguous
concept in the literature.
4
For Organization for Economic
Cooperation and Development (OECD) “competitiveness of the
country is its ability to cope with international competition as
well as to ensure a high rate of return on applied production
factors and a high level of employment”.
5
B.
Jedliński describes
this concept in two senses, emphasizing the ability of a given
economy to compete in international markets:
6
• as the country's
ability to produce and sell products or services as attractive in
terms of price and quality when compared to the same products
or services of another country (narrower approach);
• as an
ability to gain benefits from the commercial cooperation with the
countries abroad (broader approach).
1
Flanagan K., Uyarra E., Laranja M.: Reconceptualising the ‘policy mix’ for
innovation, “Research Policy”, 2011, no. 40, p. 703.
2
Kuta K., Rudnicki K.: Funkcjonowanie gospodarki otwartej - Model Mundella-
Fleminga, „Finanse I Prawo Finansowe”,2015, no 3, p. 61.
3
Kuttner K.N.: The Monetary – Fiscal Policy Mix: perspectives from the U.S , „Bank
i Kredyt”, 2002, no. 11–12, pp. 208–209.
4
Falkus M.: Korean Business: Internal and External Industrialization, „Business
History“, 2000, no. 42 (1), pp. 141-142.
5
Misztal P.:
Zdolność konkurencyjna Polskiej gospodarki w okresie 1998 - 2007 w
świetle rankingów konkurencyjności międzynarodowej [in:] Kwaśnik Z., Żukow W.
(Eds.), Aktualne wyzwania ekonomii. Radom University, Radom, 2009, p. 55.
6
Jedliński B.: Polityka handlu zagranicznego, Wydawnictwo Uniwersytetu
Gdańskiego, Gdansk, 2002, p. 72.
Both approaches emphasize the ability to prolong long-term and
effective growth and create a proportionately greater wealth of
the country than competitors in the world market. The greater the
competitiveness of the country’s economy is, the bigger the
chance for the development of the economy and in a direct way -
the citizens (the reinforcement of the economy results from the
growth of the citizens’ income).
7
The opposite situation (the lack
of the competitiveness) may mean the exclusion from the
market, subjection and domination of the stronger economies.
Poland's competitiveness can be measured by the presence of
Poland in world competitiveness rankings.
8
Over recent years,
Poland's position in international comparisons and rankings of
competitiveness has been steadily improving.
9
The institutions
preparing rankings analyzed the various criteria from areas of the
policy mix (e.g. national income per capita, unemployment,
economic performance, fiscal policy and monetary policy).
Hence, profitable macroeconomic parameters and economic
policy are often considered factors contributing to the
competitiveness of a given country.
10
For example, the World
Economic Forum publishes a ranking of global competitiveness -
The Global Competitiveness Index (GCI), which measures the
overall competitiveness of economy. This index is calculated on
the basis of 100 indicators such as: macroeconomic
environment, innovations, a degree of business development,
labour market effectiveness, development of financial markets or
higher education. In turn, International Institute for Management
Development (IMD) prepares World Competitiveness Yearbook
evaluating 55 countries based on 300 detailed criteria. The IMD
Report takes into account the following factors: economic
growth, employment, foreign trade results, price level, fiscal
policy, company efficiency or infrastructure.
11
Table 1 presents
the position of Poland in two selected rankings (GCI and IMD)
within the years 2000 – 2016.
Table 1. The ranking according to the Global Competitiveness
Index and International Institute for Management Development
Source: Own study based on: World Economic Forum, Global
Competitiveness Reports for the periods 2000-2017 and World
Competitiveness Yearbook for the periods 2000-2016.
7
Szamrej-Baran I.:
Konkurencyjność gospodarki Polski na tle wybranych gospodarek
Unii Europejskiej, „
Zeszyty Naukowe Uniwersytetu Szczecińskiego. Studia i Prace
Wydziału Nauk Ekonomicznych i Zarządzania”, 2012, no. 25, p. 125.
8
The reports that are considered the most well-known reports about the
competitiveness of the economy include: The World Bank Annual Report, Doing
Business, Report, Ernst & Young Europe Investment Attractiveness Report, Global
Competitiveness Ranking by the World Economic Forum, Global Competitiveness
Journal, Big Mac Index, International Institute for Management Development Report
(International Institute for Management Development), Bertelsmann Annual Report.
The analysis of Polish competetiveness position in some of above mentioned reports
may be found in Report of Ministry of Economic Development „Entrepreneurship in
Poland“, October 2016, Warsaw, pp. 108-111.
9
Poland 2015. Report Economy, Warsaw 2015, Ministry of Economy, p. 9.
10
Piasecki R.: Rozwój gospodarczy a globalizacja, PWE, Warsaw, 2003, pp. 69-71.
11
Stawska J.:
Konkurencyjność polskiej gospodarki w kontekście ostatniego kryzysu
finansowego, „Przedsiębiorczość i Zarządzanie”, Tom XV, Zeszyt 10, 2014, p. 376-
377.
Ranking according to Global
Competitiveness Index (GCI)
International Institute for
Management (IMD) – World
Competitiveness Yearbook
Years
Position in the
ranking GCI
Year
Position in the
ranking IMD
2000-2001
35
2000
40
2001-2002
41
2001
47
2002-2003
51
2002
45
2003-2004
45
2003
47
2004-2005
60
2004
48
2005-2006
51
2005
48
2006-2007
48
2006
50
2007-2008
51
2007
52
2008-2009
53
2008
44
2009-2010
46
2009
44
2010-2011
39
2010
32
2011-2012
41
2011
34
2012-2013
41
2012
34
2013-2014
42
2013
33
2014-2015
43
2014
36
2015-2016
41
2015
33
2016-2017
39
2016
33
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