The Polish economic collapse: Contributing factors and economic costs

Abstract

The rapid expansion of industrial output in Poland during the 1970s came to an abrupt halt during the latter part of the decade. This paper examines the factors contributing to the economic collapse and measures the economic costs in terms of foregone output. The basic results indicate that, although a decline in hard-currency imports and labor-hours worked were substantial contributing factors, most of the decline in output is accounted for by factors such as planning, managerial difficulties, or political unrest. In addition the gap between actual and potential industrial output reached more than 35%.