The nexus between monetary policy and unemployment in Poland in the view of New Neoclassical Synthesis
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The purpose of presented dissertation is the determination of mechanisms responsible for the existence of a nexus between monetary policy and unemployment in the light of the New Neoclassical Synthesis (NNS) and verification of their significance for the situation observed in Polish economy in 2000-2018 period. The analyses are performed in four stages. The first of them attempts at systematization of the achievements of existing economic theory with respect to the nexus between monetary policy and unemployment. The second presents monetary policy and unemployment in a standard DSGE framework. The final two parts approach the problem from an empirical perspective using both the statistical methods and purposefully built and developed econometric models. Finally, some postulates concerning desirable monetary policy are formulated. The analyses provided meaningful results. It was proven that monetary policy is a viable instrument that might be used in order to increase the level of output produced in Polish economy and alleviate the labour market performance when the unemployment rate is relatively high. It was also noticed that the use of expansive monetary policy for the purposes of business cycle support comes at a cost of rising inflation. As a result, expansive monetary policy should never be used in a consecutive manner, but rather as a short-run, transitory source of economic stimulation, so as to fulfil the definition of a temporary shock. The results of performed welfare analysis which proved that unemployment rate augmented Taylor rule outperformed any other combination of variables enabled us to go even a step further and to recommend that if the monetary policy is performed according to the strict guidance given by a corresponding rule and its ultimate aim is the maximisation of social welfare, understood as stabilisation of consumption at its steady state level, then simultaneous inflation and unemployment rates' targeting should comprise the best possible guidance for the purpose of monetary policy execution in an analysed small open economy.
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