Poland's Exceptional Performance During the World Economic Crisis: New Growth Accounting Evidence

Abstract

Using a growth accounting exercise based on new estimates of flows of capital and labor services in the Polish economy during the period 1995-2013, we study the consequences of the recent global economic crisis for the observed pace and structure of economic growth in Poland – a converging open economy which itself did not contribute to the breakout of the crisis. We thus provide a supply-side explanation why Poland fared so well during the world economic crisis. According to our results, the exceptional performance of the Polish economy in 2008-10 was an effect of several favorable circumstances. In particular, and unlike other European countries, it recorded both a marked increase in capital deepening and an improvement in workforce composition. We also find that the recent recession has not exerted any significant impact on the efficiency with which economic resources are used for production in Poland.