International trade and economic growth in the Polish economy

In this paper the results of linear and nonlinear causality examination performed for openness of Polish economy and its economic growth are presented. In order to extract the impact of world crisis on Polish economy we decided to apply two samples (containing quarterly data) – the full sample (Q1 1996 – Q3 2009) and pre-crisis sample (Q1 1996 – Q3 2008). The applied linear causality tests support the existence of feedback between growth rate of exports and GDP growth irrespectively of chosen time period. For both examined samples no direct causal links between growth rates of GDP and imports were detected, one can only suppose the existence of indirect links before the crisis. Bidirectional causality was found for growth rates of exports and imports only for pre-crisis sample. Some weak evidence of causal link running from growth rate of imports to exports growth rate was also found for data that covers crisis, which may somehow be interpreted as a confirmation of the fact that import growth precedes exports growth also in hectic periods. It results from our computations that in time of financial crisis of 2008 the main factor that caused Polish GDP to remain positive was the domestic demand. The results of nonlinear causality analysis provided only some weak evidence of causality running from GDP to exports, from GDP to imports and from imports to exports.