Poland 's Tight Monetary Policy

969 WordsOct 26, 20154 Pages
In the early 2000s Poland had a tight monetary policy, which ultimately curbed inflation as well as made their transition into the European Union easier. As a newly democratic government Poland was able to grow by 1.5 percent during 2009. This was due to the fact that Poland “embraced market-based economic policies, opened its markets to international trade and foreign investments, and privatized many state-owned businesses” (Hill, 2015, p. 57). Large consumer markets came available to Poland when they joined the European Union which allowed them to become a major exporter, and their exports accounted for 40% of gross domestic product. Poland’s government also kept an eye on public debt, not allowing it to grow during the recession, unlike many other countries. Because of this, investor’s confidence grew and during 2008 to 2009 there were no large outflows of funds. In 2009, Poland also benefited from giving cash grants to people who exchanged their old cars for new cars. Poland had many vehicle plants and was selling a lot of cars and parts to Germany, this was done to increase the demand for German vehicle companies. In making all of these changes, Poland was able to avoid the worst effects of the economic crisis that took over a lot of Europe during 2008 – 2009. There are a few lessons that can be derived from the Polish experience during 2008 – 2009. These lessons include, keeping public debt in check, maintaining an export business, and keeping a tight
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