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The position of Poland in selected rankings (excluding very high
positions in 2000 in both rankings) shows a positive trend
(despite the decline in some years).

2. Policy mix and its instruments and economy

Fiscal and monetary authorities have different goals and
preferences. The central bank is striving mainly to maintain a
stable price level, whereas the government - to maximize real
economic growth, taking into account the impact of the budget
deficit on GDP growth and budgetary constraints.

The

difference in the goals and preferences of the central bank and
government makes stabilization of the economy in the short
terms difficult. Reconciliation is the right choice for both
authorities, because a conflict between monetary and fiscal
policy can lead to an increase in the interest rate and budget
deficit.

The effect of dual power results in autonomous decisions by
monetary authorities and fiscal authorities

defined as policy

mix and understood as a combination of decisions by monetary
and fiscal authorities. The premise of this combination is to
stimulate and maximize the development of the economy while
minimizing unemployment

and ensuring price stability.

Consequently, the coordination of both policies contributes to
greater stability of the financial system.

The optimal situation for the economy takes place when there is
mutual complementation and support of the government and the
central bank. Choosing the policy mix as the most appropriate
combination of fiscal and monetary policy, taking into account
the adopted criteria, takes into account the characteristics of both
policies, although it should be remembered that even the most
appropriate choice does not necessarily have the desired effect.

The key problem of coordination of monetary and fiscal policies
is also the problem of concern for the entity that would be
responsible for such coordination. S. Owsiak emphasizes that the
issue of the person responsible for coordinating these policies is
still not resolved on the basis of theory or practice. Hence, this
problem requires further theoretical research and the search for
systemic solutions to develop the institutional basis for policy
mix coordination.

Despite the complementary character of fiscal and monetary
policies, there are significant differences between them. Each
policy is conducted by independent authorities, which results in
different objectives, met by using various instruments.

Fiscal policy is one of the basic forms of stimulating economic
development. Governments have at their disposal various fiscal
and legal instruments to stabilize the current state of affairs
(taxes and other public levies, expenditures, public deficits,
public debt, guarantees and loan guarantees to economic entities
influencing the state budget to achieve specific fiscal and non-
fiscal objectives).

It is not easy to conduct a good fiscal policy

, mainly due to

fiscal regulations (fiscal rules).

Fiscal policy is largely

Kuttner K. N. : The Monetary …, op. cit., p. 208-209.

Owsiak O.:

O instytucjonalnych przesłankach trudności w koordynacji polityki

monetarnej z polityką fiskalną, „Zeszyty Naukowe PTE”, no 12, Polskie Towarzystwo
Ekonomiczne, Cracow, 2012, 48 p.

Stawska J.:

Wpływ policy-mix na wzrost gospodarczy i poziom bezrobocia w

Polsce, „Zeszyty Naukowe. Finanse, Rynki finansowe, Ubezpieczenia” no. 67, 2014,
pp. 667 - 677.

Wernik A.: Problemy polityki fiskalnej w kreowaniu policy mix, „XXII konferencja

naukowa NBP -

NBP: reformy strukturalne a polityka pieniężna, Falenty 2002.

Owsiak O.: O instytucjonalnych…, op. cit., 48 p.

The reason why it is not easy to conduct a good fiscal policy explains among others,

[in]

Działo J.: Dlaczego trudno jest prowadzić “dobrą” politykę fiskalną?,

“Gospodarka Narodowa”, no. 1/2, 2012; O. Issing O.: The role of fiscal and monetary
policies in the stabilization of the economic cycle, 2005 https://www.ecb.europa
.eu/press/key/date/2005/html/sp051114.en.html (access 10 December 2017).

income rules– their aim is to maintain stable taxes and limitation of rapid changes in

their rates; cost rules– total budget costs could rise at a rate of not higher than inflation
+ 1 p.p.; public debt rules – limit for total public debt level expressed as a relation of
debt to GDP cannot exceed 60%; public deficit rules– in a given period of time (fiscal

period) budget deficit should not exceed 3% of GDP [in:] Działo J., Urbanek P.:

Wpływ reguł fiskalnych na konkurencyjność gospodarek w nowych i starych krajach

członkowskich UE. Wnioski z badań empirycznych, [in:] Grynia A. (ed.), Wybrane

influenced by political factors. Financing the health care system,
pension insurance, combating unemployment or pro-family
policy is bound to require budget spending. Rising costs
outweigh the state budget and make the tax revenues not
sufficient and as a consequence, the public deficit is increasing,
leading eventually to excessively high public debt. Both
monetary policy and fiscal policy are an essential part of the
state's economic policy and they use the money supply for the
pursuit of general economic objectives by shaping it to adapt to
the needs of the economy. Monetary policy, inter alia through
interest rate policy, affects internal demand, economic stability,
and availability of credit for businesses and individuals. The
central bank’s actions focus mainly on maintaining a low
inflation rate. According Monetary Policy Strategy beyond 2003
„(...) the monetary policy is targeted to attain a stable inflation
rate of 2.5% after year 2003 with a permissible volatility band of
±1 percentage point either side of this target.”

The appropriate policy mix is an opportunity to minimize the
effects of the crisis. Similarly, for example, between 2007 and
2012 (including the period during which the international
financial crisis emerged), when the coordination of monetary and
fiscal policy to a certain extent aroused the investment activity of
companies, so that the effects of the crisis were not so severe.

Furthermore, some analyses indicate that, without the
application of coordinated monetary and fiscal policy, the effects
of the financial crisis could be more severe.

It was particularly

during the crisis that challenges for the policy mix emerged.

a result, an increase in coordination of the policy mix was
observed in the years 2007-2013.

Policy mix seems to be a relatively popular research topic in
literature. The policy mix is examined inter alia from the point of
view of the central bank's decision-making interactions with the
government and their priorities

, assessment the impact of

monetary and fiscal policy on the level of investment

, the state

of public finances of a given country against the background of
the European Union, the OECD or other world economies,
including the context of the debt crisis

3. Research method

Authors assessing the competitiveness of the Polish economy in
the context of the policy mix used the annual statistical data
presented by the Central Statistical Office (GUS) for the years
2000 - 2016. These years include the economic slowdown 2001-
2002 and the recent financial crisis and post-crisis years. In order
to conduct the analysis, the authors selected the following
macroeconomic indicators: a) from the area of monetary policy:
interest rates, money supply, inflation rate and exchange rate, b)
from the area of fiscal policy: public debt and deficit ratios in
relation to GDP, unemployment level and GDP dynamics.

The correlation between selected variables from the monetary
and fiscal policy area was calculated

to examine the existence of

a statistically significant correlation in the policy mix in the
economy. Competitiveness has been measured by such

aspekty rozwoju i konkurencyjności nowych krajów członkowskich Unii Europejskiej,
Faculty of Economics- Informatics, Bialystok University, 2015.

Monetary Policy Strategy beyond 2003, NBP, Warsaw, February 2003, 12 p.

Stawska J.: Znaczenie policy-

mix dla działalności inwestycyjnej przedsiębiorstw w

kontekście zrównoważonego rozwoju, [in:] Borys G., Dziawgo D., Dziawgo L.,

Patrzałka L. (eds.) „Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu no.
330,

Finanse i rachunkowość na rzecz zrównoważonego rozwoju. Gospodarka - etyka

–

środowisko”, Wroclaw, 2014, 397 – 405 pp.

Stawska J.:

Wpływ …, op. cit., 667 – 677 pp.

Stawska J., Grzesiak L.: Challenges for policy mix in the context of the financial

crisis. The case of Poland, “Journal of Finance and Financial Law” no. 4/2014, Lodz,
pp. 139.

Stawska J.:

Wpływ …, op. cit., 667 – 677 pp.

Woroniecka-Leciejewicz I.: Analiza policy-

mix z uwzględnieniem interakcji

decyzyjnych między bankiem centralnym a rządem i ich priorytetów, „Zeszyty
N

aukowe Wydziału Informatycznych Technik Zarządzania Wyższej Szkoły

Informatyki Stosowanej i Zarządzania. Współczesne Problemy Zarządzania”, no.
1/2011.

Stawska J.: Znaczenie …, op. cit., 397 – 405 pp.

Stawska J.:

Koszty obsługi długu publicznego w Polsce w kontekście kryzysu

finansowego w Unii Europejskiej, „Acta Universitatis Lodzensis, Folia Oeconomica
no 279”, Lodz University Press, Lodz, 2013,41 – 56 pp.

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