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RESEARCH PAPER
Imported Inflation and the Wage-Price Nexus in Poland
1
Katedra Modeli i Prognoz Ekonometrycznych, Uniwersytet Łódzki, Polska
2
Katedra Ekonomii I, Szkoła Główna Handlowa w Warszawie, Polska
Submission date: 2023-04-13
Final revision date: 2023-06-22
Acceptance date: 2023-07-10
Publication date: 2023-09-29
Corresponding author
GNPJE 2023;315(3):48-70
KEYWORDS
JEL CLASSIFICATION CODES
ABSTRACT
Quantitative analysis is an appropriate tool to disentangle the impact of various
recent shocks on price inflation in Poland. This article presents an econometric
macro-model of prices and wages in which the direct impact of supply shocks
transmitted from energy commodity markets on inflation is highlighted, and the
impact of these shocks on the wage-price nexus. Due to the secrecy of data on
the prices and volumes of natural gas imports from Russia to Poland, we propose
a method for estimating the natural gas import deflator based on data on other main energy resources (crude oil and coal). The model allows us to assess to what
extent domestic prices (CPI) depend on trends in world markets, including energy
commodity prices. It is also possible to estimate the impact of fiscal policy on price
developments. The equations of the model are constructed using cointegration
methods for disaggregated consumer and import price indices. The properties of
the system of 19 equations are investigated using multiplier analysis. We present
the results of a simulation in which no anti-crisis measures were assumed during
the COVID-19 pandemic. The obtained results indicate the important role of fiscal
policy in shaping prices.
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