Nieefektywność alokacji zatrudnienia w cyklu koniunkturalnym w Polsce
The Inefficiency of Employment Allocation in the Business Cycle in Poland

Summary/Abstract: The authors have calculated the cyclical component of the inefficiency gap regarding the allocation of employment in the Polish economy in the period 1995 Q1–2011 Q2 and decomposed the inefficiency gap into its component elements related to wage and price markups. Inefficiency gap was found to be strongly procyclical while both markups appeared to be anticyclical. The fluctuations in the wage markups explain ca. 69% of the variance of inefficiency gap. Inefficiency gap fluctuates over the business cycle with ca. one-quarter lag against the GDP. The calculated measures of ineffective allocation were used to analyse the reaction of the economy to monetary policy shocks and to identify the key characteristics of cyclical fluctuations in the Polish labour market seen in the given period. The authors also analysed the links between the inefficiency of employment allocation and the related concepts of the demand gap and unemployment gap. There are significant differences between the results obtained for the Polish economy as compared with the results regarding the US economy and the euro area. The major differences refer to a lower importance of wage markups in explaining the variability of the inefficiency gap in the case of Poland and to the different character of fluctuation of price markups, which are procyclical in the USA, acyclical in the euro area, and anticyclical in Poland. The analysis of the conditional correlation (based on the VAR model) suggests that different reaction of price markups to monetary shocks may be one of the causes of those differences.

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