Responses of output in Poland to shocks to the exchange rate, the stock price, and other macroeconomic variables: a VAR model

Abstract

A general equilibrium model is specified to examine possible impacts of real or nominal depreciation, stock market movements, and changes in other macroeconomic variables on real output for Poland. The VAR model is applied in empirical work. Real depreciation is contractionary in the first quarter, expansionary in the second quarter, and neutral thereafter, and nominal depreciation is contractionary in the first quarter and neutral thereafter. Real output does not respond significantly to stock market movements or the government deficit spending/GDP ratio.