Economic Situation Barometer as an Universal Tool for Assessing the Economic Situation in Polish Regions – A Theoretical and Empirical Study

Abstract

The aim of the article is to propose the construction of a synthetic, universal tool for assessing the economic situation in Polish regions, i.e. a quantitative indicator of the economic situation for a given area (voivodeship). The subject of the study are economic variables and their cyclical adjustment as component variables of the regional barometer of the economic situation. To construct a synthetic index of the economic situation in a regional perspective, aggregated data on the following economic macro quantities were used: registered unemployment rate; number of unsubsidized job offers submitted to labor offices; dynamics of the average salary in the enterprise sector; dynamics of construction and assembly production; dynamics of sold industrial production; dynamics of retail sales; number of building permits granted; value of the IFO index for the German economy, the Pengab banking sector economic situation index. The TRAMO/SEATS procedure was used to eliminate the seasonal component from the empirical time series data. The Christiano-Fitzgerald band-pass filter was used to estimate the cyclical component.

The obtained research results indicate that building a regional barometer of the economic situation is possible and even necessary for practical reasons. Changes in the economic situation in the regions do not necessarily have to coincide with changes in the economic situation in the country as a whole. Each region, being a separate administrative unit of the country and at the same time having a different economic structure, level of development and geographical location – has its own economic cycle. The results defining the current state of the regional economic situation together with its short-term forecast can – and should – be the subject of interest of regional authorities. Along with the growing autonomy of individual regions, responding to the situation in accordance with the principle of subsidiarity promotes a more adequate and precise impact of public (regional) authorities on changes in economic activity in regions, especially those where the variability of the economic situation is relatively high. The research results described in the literature allow for a clear definition of their collectiveness.