Michał Konopczyński

(Polish) PDF


The article introduces a simple behavioral model for simulating the dynamics of a small economy, that is a member of the Economic and Monetary Union (EMU). The model takes account, among others, of the process of nominal convergence of prices in the EMU and its impact on the trade balance, the evolution of prices depending on the level of stocks and flows of financial capital. With the help of certain methods of analysis of systems of differential equations, we are examining the conditions for stability of the economy. We show that they have the form of certain restrictions on behavioral parameters, which reflect the strength of the reaction of economic agents to imbalances. To illustrate these proposals, we carry out computer simulations. Finally, we present a dynamic analysis of the process of transition between two states of equilibrium, induced by fiscal expansion.


monetary union, fiscal policy, euro, stability conditions


[1] Brock W.A., Malliaris A.G., (1996), Differential Equations, Stability and Chaos in Dynamic Economics, Elsevier.

[2] Carlberg M., (2007), Macroeconomics of Monetary Union, Springer.

[3] De Grauwe, P., (2007), Economics of Monetary Union, 7th edition, Oxford University Press.

[4] EBC (2005), Monetary Policy and Infl ation Differentials in a Heterogenous Currency Area, ECB Monthly Bulletin, nr 5.

[5] Gandolfo G., (1980), Economic Dynamics: Methods and Models, North-Holland.

[6] Gandolfo G., (1997), Economic Dynamics: Study Edition, Springer-Verlag.

[7] Holt C., Modigliani F., Muth J., Simon H., (1960), Planning, Production, Inventories and the Work Force, Prentice Hall, Englewood Cliffs.

[8] Komisja Europejska (1990), One Market, One Money: An Evaluation of the Potential Benefi ts and Costs of Forming an Economic and Monetary Union, European Economy, 44.

[9] Konopczyński M., (2006), Skuteczność polityki fi skalnej w unii gospodarczej i walutowej, Ekonomista, 5, 619–646.

[10] Konopczyński M., (2009), Krótkookresowy symulacyjny model cyklu koniunkturalnego w Unii Gospodarczej i Walutowej z zapasami w roli głównej, w: J. Czech-Rogosz, J. Pietrucha, R. Żelazny (red.), Koniunktura gospodarcza. Od bańki internetowej do kryzysu subprime, Wydawnictwo C. H. Beck, Warszawa, 59–72.

[11] Parsley, David & Wei, Shang-Jin (2008), In Search of a Euro Effect: Big Lessons from a Big Mac Meal?, Journal of International Money and Finance, 27 (2), 260–276.

[12] Pentecost, E.J., van Poeck A., (2001), red., European Monetary Integration: Past, Present and Future, Edward Elgar.

[13] Rogers J.H., Hufbauer C.G., Wada E., (2001), Price Level Convergence and Inflation in Europe, Institute for International Economics, Working Paper No. 01-1.

[14] Romer D., (1996), Advanced Macroeconomics, McGraw-Hill.

[15] Sachs J.D., Larrain F.B., (1993), Macroeconomics in the Global Economy, Prentice Hall Inc., Englewood Cliffs.

[16] Sosvilla-Rivero S., Gil-Pareja S., (2002), Price Convergence in the European Union, Documento de Trabajo, Working paper, May 2002.

[17] Temperton P., (2001), EURO. Wspólna waluta, Felberg SJA, Warszawa.

[18] Wolszczak-Derlacz J., (2010), Does One Currency Mean One Price?, Eastern European Economics, 48 (2), 87–114.

[19] Wyplosz Ch., (2006), European Monetary Union. The Dark Sides of a Major Success, Economic Policy, 21, 207–261.

Back to top
© 2019–2022 Copyright by Statistics Poland, some rights reserved. Creative Commons Attribution-ShareAlike 4.0 International Public License (CC BY-SA 4.0) Creative Commons — Attribution-ShareAlike 4.0 International — CC BY-SA 4.0