Abstract:

Economic activity behavior depends on all the external and internal events that have the potential to disrupt the flow of business cycle. These causes could be related with changes in main macroeconomic processes, economic policy or adjustments in external markets, like world market of energy resource. Prices of oil and gas have a significant meaning for economic development, but the relationship between economic growth and changes in energy resource prices are not always identified. Several studies have focused on the relationship between economic activity and the oil prices in time domain, where authors investigate the dynamic behavior with linear or non-linear approach. In this paper, we use a VECM model and Granger causality test in time and frequency domain to investigate the movements between oil prices, natural gas prices and economic activity in Poland. The findings of research provide evidence that economic activity in Poland depends on oil prices in long term (low and medium frequencies) and short term. In the case of natural gas prices, there is long-term and short-term neutrality of economic activity in Poland, which means that a changes in gas prices have no effect on economic growth.