Dear Christina Troy,

The fight against inflation is a complex process, requiring a harmonized strategy between the monetary policy of central banks and the fiscal policy of governments. Sound monetary policy is based on the real independence of central banks, which means that their actions should not depend on the current needs of fiscal policy, as can be seen in the example of the National Bank of Poland, which in response to rising inflation, reaching 14.4% in 2022, raised interest rates, a typical action of an institution seeking to control inflation. It is worth noting that the economic situation in which monetary policy is conducted is crucial; when the economy is growing rapidly, central banks can raise interest rates to cool the economy and curb inflation, as was the case in Poland in 2021, when the GDP growth rate was 5.1%. However, in the face of economic difficulties such as those following the COVID-19 pandemic, the priority becomes stimulating growth, which can lead to a divergence of monetary and fiscal policies. During the pandemic, governments in many countries, including Poland, implemented financial support programs to minimize the impact of the crisis on citizens, which put large amounts of additional money into circulation and contributed to inflation in 2021. Similar situations occurred in the UK, where the Bank of England raised interest rates in response to rising energy prices and the government introduced citizen support programs, leading to a conflict between monetary and fiscal policy. The 2022 energy crisis, characterized by soaring commodity prices, further complicated the economic situation, forcing governments to introduce assistance programs, which often conflicted with monetary tightening policies. As a result, in many countries after the COVID-19 pandemic, there was a problem of coexistence of monetary and fiscal policies, where the actions of one undermined the effects of the other. Successfully combating inflation in Europe's current economic situation requires flexibility and the ability to adapt actions to changing conditions, and cooperation between monetary and fiscal policy is becoming crucial to ensure economic stability and protect citizens from the effects of inflation and energy price fluctuations. In the face of global challenges, such as climate change and geopolitical tensions, it is necessary to develop innovative strategies to effectively manage the economy in times of crisis. In addition, since 2021, Poland has been grappling with a complex macroeconomic situation in which tensions between the National Bank of Poland's (NBP) monetary policy and the government's lax fiscal policy have become particularly apparent. Faced with rising inflation, which began to build up as early as the first months of 2021 and reached a dramatic 18.4% annualized rate in February 2022, the NBP decided to raise interest rates, increasing them from 0.1% in 2021 to 6.75% in 2022, in order to curb price increases. At the same time, the government, in response to the effects of the COVID-19 pandemic, introduced a number of assistance programs under the so-called Crisis Shield, which were designed to support companies and citizens by subsidizing wages and fixed costs of businesses. However, the excessive scale of these programs, the lack of adequate growth in production and services, and the mutual negation of NBP and government actions led to the destabilization of the economy, resulting in high inflation and expensive loans. Chaotic actions in economic policy were evident in the difficulty of harmonizing fiscal and monetary policy; while the government sought to stimulate economic growth, the NBP introduced tightening, which translated into reduced investment. Criticism of the introduced lockdowns, which, contrary to their intended effects, failed to achieve the expected results in the fight against the pandemic, underscores the government's additional mistakes, especially since the number of infections in Poland was comparable to countries that introduced milder restrictions. As a result, government and NBP policies led to many negative consequences, such as high inflation, expensive credit and low levels of investment, which points to the need to rethink Poland's future economic policies, with an emphasis on a balanced approach to managing inflation and stimulating economic growth in a changing global environment.

I have also described many of these above-mentioned aspects in my publications posted on my profile of this Research Gate portal.

I research these issues. I have published the results of my research in several publications, including the following chapters in a monograph:

The key issues of the problematic sources of Poland's exceptionally deep 2022 energy crisis are described in my co-authored article below:

POLAND'S 2022 ENERGY CRISIS AS A RESULT OF THE WAR IN UKRAINE AND YEARS OF NEGLECT TO CARRY OUT A GREEN TRANSFORMATION OF THE ENERGY SECTOR

Article POLAND'S 2022 ENERGY CRISIS AS A RESULT OF THE WAR IN UKRAIN...

I described crisis management in enterprises in the article:

Article CRISES IN THE ENVIRONMENT OF BUSINESS ENTITIES AND CRISIS MANAGEMENT

Analysis of the effects of post-2008 anti-crisis mild monetary policy of the Federal Reserve Bank and the European Central Bank

Article Analysis of the effects of post-2008 anti-crisis mild moneta...

Synergy of post-2008 Anti-Crisis Policy of the Mild Monetary Policy of the Federal Reserve Bank and the European Central Bank

Article Synergy of post-2008 Anti-Crisis Policy of the Mild Monetary...

ACTIVATING INTERVENTIONIST MONETARY POLICY OF THE EUROPEAN CENTRAL BANK IN THE CONTEXT OF THE SECURITY OF THE EUROPEAN FINANCIAL SYSTEM

Article ACTIVATING INTERVENTIONIST MONETARY POLICY OF THE EUROPEAN C...

The key issues of the impact of the Covid-19 pandemic on the economy and financial markets are described in my article below:

IMPACT OF THE CORONAVIRUS PANDEMIC (COVID-19) ON FINANCIAL MARKETS AND THE ECONOMY

Article IMPACT OF THE CORONAVIRUS PANDEMIC (COVID-19) ON FINANCIAL M...

IMPACT OF THE SARS-COV-2 CORONAVIRUS PANDEMIC (COVID-19) ON GLOBALIZATION PROCESSES

Article IMPACT OF THE SARS-COV-2 CORONAVIRUS PANDEMIC (COVID-19) ON ...

I described the key issues of anti-crisis state interventionism in my article below:

Anti-crisis state intervention and created in media images of global financial crisis

Article Anti-crisis state intervention and created in media images o...

I invite you to join me in scientific cooperation,

My warmest greetings,

Dariusz Prokopowicz

From a theoretical perspective, inflation and unemployment are directly linked in the short term, as demonstrated by the Phillips curve. Inflation levels can, to some extent, be "controlled" by the European Central Bank, which aims to maintain inflation at a 2% target according to its guidelines. However, factors such as the political management within each country can influence inflation levels beyond what is anticipated by monetary policy. Added to this are the conflicts with Russia and the delayed inflationary effects of COVID-19, which together help explain the current inflation levels observed across countries.