Hysteresis in Poland’s Economic Growth?

Kovács, O. (2009): Hysteresis in Poland’s Economic Growth? News of the Month, ICEG European Center, October 2009 pp. 4-8.

This study addresses the issue of whether the Polish-miracle, a unique positive growth rate during the recession of 2009, gives us a misleading feeling of comfort or it is a well-based and sustainable path of the Polish development. While we have been trying to call the attention to a very interesting hysteresis-related positive growth situation in Poland, we have to emphasise that this growth condition is very fragile, and one has to expect a further depressing impact of global financial crisis. Poland has to successfully manage increasing inflation, has to resolve the problem of the shortages of working force through a very surpassing luring mechanism. The Polish government should begin the restructuring of the public sector in order to liquidate the high rent-seeking of well-organised larger interest groups and lobbies in order to make the fiscal policy sustainable in the long run before the debt level would climb up over the Maastricht threshold.