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Analyzing the Correlation between Central Bank Interest Rates and Inflation on the Example of Poland within the European Union

Author

Listed:
  • Piotr Borawski
  • Aneta Beldycka-Borawska
  • Ireneusz Zuchowski
  • Tomasz Rokicki
  • Andrzej Parzonko
  • Lisa Holden
  • Renata Marks-Bielska

Abstract

Purpose: The main aim of this study was to determine the relationship between inflation and interest rates of the Central Bank in Poland with the background of European integration and the COVID-19 pandemic. Design/Methodology/Approach: The Central Bank of Poland (CBP) was the main source of data for the analysis (1998-2023). We used different methods which helped to analyze the changes in inflation and interest rates in Poland, for example Augmented Dickey Fuller test (ADF test), Autoregressive Moving Average model (ARIMA model) and the regression analysis using the Classical Method of Least Square. Findings: The study demonstrated that inflation will decrease steadily in Poland due to relatively high interest rates. The Central Bank of Poland and government agencies should implement cohesive policies to reduce inflation. The Central Bank of Poland has increased interest rates to fight inflation, whereas the wide range of social welfare programs introduced by the government has contributed to higher inflation. Practical implications: The results will fill in the gap concerning the financial policy of Central Bank. Originality/Value: The new information about impact of interest rate on inflation and a ARiMA model was presented.

Suggested Citation

  • Piotr Borawski & Aneta Beldycka-Borawska & Ireneusz Zuchowski & Tomasz Rokicki & Andrzej Parzonko & Lisa Holden & Renata Marks-Bielska, 2024. "Analyzing the Correlation between Central Bank Interest Rates and Inflation on the Example of Poland within the European Union," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 82-95.
    • Handle: RePEc:ers:journl:v:xxvii:y:2024:i:1:p:82-95
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    References listed on IDEAS

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    Cited by:

    1. Piotr Borawski & Aneta Beldycka-Borawska & Tomasz Rokicki & Lisa Holden & Ireneusz Zuchowski & Katarzyna Brodzinska, 2024. "Spatial Differentiation of Poland’s Gross Domestic Product," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 423-436.
    2. Piotr Borawski & Aneta Beldycka-Borawska & Tomasz Rokicki & Lisa Holden, 2024. "The Role of Money Supply in Shaping Poland’s Gross Domestic Product," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 69-81.

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    More about this item

    Keywords

    Inflation; interest rates; European integration.;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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