Fixed capital and long run economic growth: evidence from Poland

In this paper the results of testing the causal interdependences between the gross fixed capital formation and GDP in Poland are presented. Some recent theoretical deliberations (like alternative method of testing for direction and sign of long run causality) and econometric tests (bootstrap procedure, nonlinear causality test) were applied. The dataset included quarterly data for the period Q1 2000 – Q4 2009, however the research was also performed for non–crisis subsample (Q3 2002 – Q2 2008). Due to theoretical (formulation of growth models) and practical (omission of important variables) reasons employment was chosen as an additional variable. The significant evidence of short run feedback between fixed assets and GDP as well as between fixed assets and employment were found in both periods analyzed. However, the long run positive impact of fixed capital on economic growth was found only for reduced sample. Moreover, the robustness of these results was also approved. The results of this paper provided evidence to claim that fixed capital in Poland is still under its growth–maximising level. Although participation in UE stimulated rise in fixed assets, economic crisis have distorted this process. The main policy recommendation resulting from this paper is that the Polish government and private sector should definitely increase the level of fixed investment

Fixed capital and long run economic growth: evidence from Poland

In this paper the results of testing the causal interdependences between the gross fixed capital formation and GDP in Poland are presented. Some recent theoretical deliberations (like alternative method of testing for direction and sign of long run causality) and econometric tests (bootstrap procedure, nonlinear causality test) were applied. The dataset included quarterly data for the period Q1 2000 – Q4 2009, however the research was also performed for non–crisis subsample (Q3 2002 – Q2 2008). Due to theoretical (formulation of growth models) and practical (omission of important variables) reasons employment was chosen as an additional variable. The significant evidence of short run feedback between fixed assets and GDP as well as between fixed assets and employment were found in both periods analyzed. However, the long run positive impact of fixed capital on economic growth was found only for reduced sample. Moreover, the robustness of these results was also approved. The results of this paper provided evidence to claim that fixed capital in Poland is still under its growth–maximising level. Although participation in UE stimulated rise in fixed assets, economic crisis have distorted this process. The main policy recommendation resulting from this paper is that the Polish government and private sector should definitely increase the level of fixed investment

Oil usage, gas consumption and economic growth: Evidence from Poland

This paper investigates causal links between economic growth, oil consumption and natural gas usage in Poland on the basis of quarterly data for the period Q1 2000 – Q4 2009. The application of the Toda–Yamamoto procedure, a nonlinear Granger causality test, bootstrap techniques and an analysis of VECM led to the conclusion that both oil and natural gas usage caused GDP growth in the short–term. However, in the long–term causality ran in the opposite direction. Both these findings are believed to be the consequence of the recent transformation of the Polish economy from energy intensive activities towards services, which in general are not energy–consuming

Impact of hard coal usage for metal production on economic growth of Poland

This study provides an analysis of causal links between GDP and usage of hard coal in production of metals in Poland. In order to assure the correctness of computations a third variable – employment – was included in the dataset. Linear and nonlinear dynamic interactions were investigated for the period 2000–2009 on a quarterly basis. The results suggest that in examined period there was a short–run unidirectional causality from GDP to coal usage. On the other hand, the usage of hard coal in production of metals was found to cause GDP and employment in the long–run. Moreover, the impulse response analysis confirmed that the impact of coal usage on GDP and employment was generally negative. All these findings lead to conclusion that in recent decade the usage of hard coal in production of metals did not have a positive impact on economic growth and employment in Poland

Oil usage, gas consumption and economic growth: Evidence from Poland

This paper investigates causal links between economic growth, oil consumption and natural gas usage in Poland on the basis of quarterly data for the period Q1 2000 – Q4 2009. The application of the Toda–Yamamoto procedure, a nonlinear Granger causality test, bootstrap techniques and an analysis of VECM led to the conclusion that both oil and natural gas usage caused GDP growth in the short–term. However, in the long–term causality ran in the opposite direction. Both these findings are believed to be the consequence of the recent transformation of the Polish economy from energy intensive activities towards services, which in general are not energy–consuming

Application of bootstrap methods in investigation of size of the Granger causality test for integrated VAR systems

This paper examines the size performance of Toda-Yamamoto test for Granger causality in case of trivariate integrated-cointegrated VAR systems and relatively small sample size. The standard asymptotic distribution theory and the residual-based bootstrap approach are applied. A variety of types of distribution of error term is considered. The impact of misspecification of initial parameters as well as the influence of increase of sample size and number of bootstrap replications on size performance of Toda-Yamamoto test statistics is also examined. The results of conducted simulation study confirm that standard asymptotic distribution theory may often cause significant over-rejection. Application of bootstrap methods usually leads to improvement of size performance of Toda-Yamamoto test. However, in some cases considered bootstrap method also leads to serious size distortion and performs worse than the traditional approach based on distribution

Impact of hard coal usage for metal production on economic growth of Poland

This study provides an analysis of causal links between GDP and usage of hard coal in production of metals in Poland. In order to assure the correctness of computations a third variable – employment – was included in the dataset. Linear and nonlinear dynamic interactions were investigated for the period 2000–2009 on a quarterly basis. The results suggest that in examined period there was a short–run unidirectional causality from GDP to coal usage. On the other hand, the usage of hard coal in production of metals was found to cause GDP and employment in the long–run. Moreover, the impulse response analysis confirmed that the impact of coal usage on GDP and employment was generally negative. All these findings lead to conclusion that in recent decade the usage of hard coal in production of metals did not have a positive impact on economic growth and employment in Poland

Application of bootstrap methods in investigation of size of the Granger causality test for integrated VAR systems

This paper examines the size performance of Toda-Yamamoto test for Granger causality in case of trivariate integrated-cointegrated VAR systems and relatively small sample size. The standard asymptotic distribution theory and the residual-based bootstrap approach are applied. A variety of types of distribution of error term is considered. The impact of misspecification of initial parameters as well as the influence of increase of sample size and number of bootstrap replications on size performance of Toda-Yamamoto test statistics is also examined. The results of conducted simulation study confirm that standard asymptotic distribution theory may often cause significant over-rejection. Application of bootstrap methods usually leads to improvement of size performance of Toda-Yamamoto test. However, in some cases considered bootstrap method also leads to serious size distortion and performs worse than the traditional approach based on distribution

The Nexus between Improvements in Economic Freedom and Growth: Evidence from CEE Countries in Transition

This study examines the causal links between improvements in economic freedom and changes in GDP per capita of new EU members in transition in the period 2000-2009. The empirical results suggest significant causality running from changes in monetary and fiscal freedom, trade openness, regulation of credit, labour, and business, legal structure and security of property rights, and access to sound money to movements in GDP per capita, especially in less and moderately developed CEE transition countries. Moreover, we find evidence that improvements in economic freedom are one of the main factors stimulating the convergence of these economies towards rich EU members. The evidence of causality in the opposite direction is much weaker