Twelfth Global Studies Conference

Abstract

The stabilization of Poland’s exchange rate and the increased wealth per capita is deconstructed with the Lucas barter economy model from the marginal utility generated from underlying basket of goods with Poland’s counterparty. The marginal utility of consumption exchange rate is applied to the Lucas wealth model to dismantle domestic/foreign investment and drivers of exports/imports. The level of GNI per person in Poland has increased from $2,040 (1992) to $12,680 (2016), generating an average growth of 2.17%. As Poland ranks as the world’s 19th largest exporter, Poland stands to achieve mature economy status by 2020 having gained a GNI of $15,000 per person. Poland’s wealth is evaluated by comparing Poland to their top five exporter counterparts (Germany, United Kingdom, Czech Republic, France and Italy); representing 50.3% of the exports and their top five importer counterparts (Germany, China, Italy, Netherlands and Czech Republic); representing 57.4% of their imports as well as against the United States and the Euro region as a whole. Inflation is accounted for within domestic/foreign investments as well as marginal utility of consumption of both Poland’s goods as well as Poland’s counterparties. Tariffs, fiscal policies, monetary policies are incorporated as constraints on the wealth equation. The drivers of wealth are found by using balance of payment data, market exchange rate, aggregate wealth accounting for the population growth and the utility of consumption.