Here you can find some of my research papers. The views expressed in these papers are those of the authors and do not necessarily represent those of the European Commission.
Working papers
"Energy prices as drivers of inflation and real output: An estimated structural model for the euro area"
with B. Pataracchia, P. Pfeiffer and M. Ratto
We develop and estimate an open economy macroeconomic model to quantify the role of energy prices in driving euro area inflation and output dynamics. The model incorporates a rich pass-through of energy import prices into consumer and producer prices and time-dependent demand elasticities (low in the short and high in the long run). With heterogeneous households, sharp increases in commodity prices also erode disposable incomes and weigh further on consumer spending. The model estimation with Bayesian methods suggests that in 2022 energy import prices alone have contributed around 3.5 pps. to inflation and reduced GDP growth in the euro area by around one pps. We also evaluate the model’s performance in matching empirical evidence in energy and import markets.
"Self-financing transfers in a cash-in-advance economy with downward nominal wage rigidity"
In this paper we study the impact of an increase in transfer payments, i.e., fiscal stimulus in a form of direct payments to individuals, on budget deficits. We show that in a standard competitive business cycle framework augmented with the cash-in-advance constraint on consumption and downward nominal wage rigidity the transfers payments multiplier is positive when the economy is below its full employment level. Increasing transfer payments in these circumstances relaxes the cash-in-advance constraint and effectively undoes the inefficiency caused by the wage rigidity. Since this results in higher income and consumption which are both taxed, the fiscal stimulus can possibly be self-financing – it pays for itself in a form of increased tax revenue. We show that under realistic calibration of the model and for the existing tax rates in the European Union when the economy is far enough from the full employment, the transfer multipliers are indeed big enough for the tax revenue to increase sufficiently so that the fiscal stimulus largely finances itself.
Publications
“Comparing business cycles in the Eurozone and in Poland: a Bayesian DSGE approach”
with A. Cieślik, Bank i Kredyt, Vol. 51, No. 4, pp. 317-366, 2020.
In this article we compare business cycles in the Eurozone and in Poland using a DSGE approach. We estimate the Smets and Wouters (2007) model using Bayesian methods and analyze impulse response functions of model variables, as well as their variance decomposition. Although we do not find significant differences in structural parameters’ estimates, it turns out that persistence and volatility of shocks differ among two economies. Impulse response functions are comparable and output fluctuations are driven by similar demand shocks, but we observe a significant effect of the exogenous spending shock in the Eurozone and the price markup shock in Poland. Our analysis also shows that the euro adoption in Poland is currently not recommended, unless relevant changes in macroeconomic and labour market policies are implemented.
“Total Factor Productivity and the Terms of Trade”
IWH-CompNet Discussion Papers 6/2019, Halle Institute for Economic Research, 2019.
In this paper we analyse how the terms of trade (TOT) – the ratio of export prices to import prices – affect total factor productivity (TFP). We provide empirical macroeconomic evidence for the European Union countries based on the times series SVAR analysis and microeconomic evidence based on industry level data from the Competitiveness Research Network (CompNet) database which shows that the terms of trade improvements are associated with a slowdown in the total factor productivity growth. Next, we build a theoretical model which combines open economy framework with the endogenous growth theory. In the model the terms of trade improvements increase demand for labour employed in exportable goods production at the expense of technology production (research and development – R&D) which leads to a shift of resources from knowledge development towards physical exportable goods. This reallocation has a negative impact on the TFP growth. Under a plausible calibration the model is able to replicate the observed empirical pattern
“Easing legal and administrative obstacles in EU border regions. Case Study No. 7. Transport infrastructure. Policy frameworks hampering development of regional transport infrastructure”
with I. Styczyńska, European Commission, 2017.
Transport infrastructure plays an important role in regional development and in ensuring territorial cohesion of the European Union (EU). Unfortunately, border regions, frequently peripheral, suffer from underdeveloped transport infrastructure and its unsatisfactory maintenance. Among the reasons for this are inadequate national policy frameworks, which include lack of cross-border-oriented regulations governing cross-border activities, divergence of provisions in existing legal frameworks, insufficient cooperation and coordination and lack of human and institutional capacities on both sides of the border. This case study is aimed at showing how these barriers hinder the development and maintenance of local, regional and cross-border transport infrastructures in the German-Polish border region. Discrepancies in regulations related to technical requirements, signalling and safety systems, public procurement, construction law, environmental protection and taxes cause a number of issues. These include: inconsistencies and limited interoperability of developed transport connections; the need for duplicative permits, licenses and procedures; and additional effort in tax settlements. The difficulties for the development of transport infrastructure in border regions lead to a limited cross-border mobility and trade, as well as to sub-optimal access to labour market and education. All together this decreases growth and reduces the attractiveness of the border regions. However, these effects have not been quantified for the DE-PL border up to now.
“Does Zipf’s law hold for Polish cities?”
with A. Cieślik, Miscellanea Geographica – Regional Studies on Development, Vol. 20, No. 4, pp. 5-10, 2016.
In this paper we study Zipf’s law, which postulates that the product of a city’s population and its rank (the number of cities with a larger or equal population) is constant for every city in a given region. We show that the empirical literature indicates that the law may not always hold, although its general form, the rank-size rule, could be a good first approximation of city size distribution. We perform our own empirical analysis of the distribution of the population of Polish cities on the largest possible sample to find that Zipf’s law is rejected for Poland as the city sizes are less evenly distributed than it predicts.
“Social protection in TTIP”
with Ch. Hartwell, in: World Trade Institute, TTIP and the EU Member States, World Trade Institute, University of Bern, Bern, pp. 160-165, 2016.
The regulatory cooperation chapter in TTIP may affect socio-economic variables, but it is not expected to lead to the lowering of employees’ rights. Regulatory cooperation will be focused on measures that directly affect goods and services traded between the EU and US, not on domestic policies (such as the minimum wage, unemployment benefits, unemployment protection). These issues will remain the exclusive domain of the respective legal and institutional domestic frameworks of the EU and EU Member States and the US. Regulatory cooperation may affect a country’s attractiveness to investors and thus affect wages, jobs and growth – however this is an investment induced effect, not a regulatory aspect. Moreover, this effect is likely to be positive because of a lower cost base for EU and US firms. Overall, the traditional free trade (market access) elements of TTIP are likely to have a positive social impact. Economic studies point to rising wages for many low- and high-skilled workers in key sectors, although there is also risk of falling wages in other sectors. Although there will be labour shifts between sectors, they are likely to be less than two percent of any likely labour reallocation due to other factors such as technological progress and domestic policies. For the sake of mitigating short-term pressures arising for EU Member State labour forces, domestic labour and education policies will be important.
“Comparison of the EU service offers for the TTIP and TiSA negotiations”
with Ch. Hartwell, B. Radzikowski and K. Beaumont, European Parliament, 2015.
A comparison of the services offers which the European Union has made for the negotiations on the EU-US Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TiSA) shows that, in general, both treaties follow similar approaches and points of difference are minor; both TiSA and TTIP apply a positive listing approach in regards to market access and negative listing in regards to national treatment, and the rules governing market access and national treatment do not differ between the two agreements. The most significant differences in sector- specific provisions are featured in the transport sector and educational services, while the highest harmonisation of provisions is in the energy sector and communications. Overall, the service provisions in TiSA and TTIP are very similar, although it seems that the level of trade liberalization is higher is TiSA.
“Poland – Operational Programme 2007-2013 Innovative Economy – Case Study”
with E. Jarocinska, European Commission, 2015.
“High growth enterprises in Poland”
with E. Balcerowicz, A. Kondratowicz and B. Radzikowski, Polska Agencja Rozwoju Przedsiębiorczości, 2015 (published in Polish as “Przedsiębiorstwa wysokiego wzrostu w Polsce”).
Other
“Regulatory cooperation in TTIP”
World Commerce Review, Vol. 9, Issue 2, pp. 90-92, June 2015.