Wage and Price Inflation in Poland in the Period of Transition: The Cointegration Analysis

The paper focuses on the long run relationships between wages, prices and labour productivity in the Polish economy by applying recent developments in the field of multivariate cointegration analysis. We followed modeling strategy which is suggested by Greenslade et al. (1999) and present all stages of the analysis which leads to the fully economically identified system of equations representing long run relationships. The investigation is based on the quarterly data from 1992.1 to 1999.2 which covers the period of transition of the Polish economy from the centrally planned system towards the market one. Basing on the empirical results we can argue that wages (costs) were one of the main forces driving inflation in Poland during that period. Also labor productivity proved to be stimulated by the increase of the real wages. On the other hand the hypothesis concerning the relationship between wages and unemployment was rejected by the data.     

Has Structural Economic Vulnerability Decreased in Least Developed Countries? Lessons Drawn from Retrospective Indices

The Economic Vulnerability Index (EVI) is a well-recognised measure of the structural vulnerability of developing countries and is regularly used and published by the United Nations for cross-country comparison purposes, primarily to review the list of Least Developed Countries (LDCs). However, due to the revisions in methodology occurring over time, the official EVI cannot be used to assess the changes in vulnerability. In this paper, we use two retrospective series of the EVI, based on constant definitions. The real change in vulnerability is thus isolated from the impact of revisions in the design of the index, allowing comparison of the evolution of LDCs and non-LDCs. The implications of the revisions in the EVI design are then discussed.