Central European Economic Journal, Dluga 44/50, Warsaw (2026)

08/06/2026

U is for “Unit Roots”

Some concepts in economics are less “flashy insight” and more “silent gatekeepers of credibility.”

Unit roots belong firmly to that second category.

At first glance, a time series with a unit root can look completely harmless—smooth trends, plausible movements, visually intuitive patterns. But statistically, it is doing something far more problematic: it refuses to “forget” the past.

In more technical terms, a unit root process is non-stationary. Shocks don’t fade away—they accumulate. A policy change in 2010 can still be influencing the series in 2020, not because of structural persistence, but because the data-generating process never properly stabilises.

Why does this matter?

Because most standard econometric tools assume stationarity. Regressing one non-stationary series on another can produce spurious relationships—beautiful t-stats, convincing R², and entirely misleading conclusions.

This is why testing (ADF, Phillips–Perron) and transformation (differencing, cointegration frameworks) are not just technical rituals—they are safeguards against being fooled by trends that only look meaningful.

So “U” is a quiet reminder: before interpreting relationships, ask whether the data is even speaking in a stable language.

Because sometimes the most convincing results are the ones that shouldn’t exist at all.

05/06/2026

🔙

Today we revisit a study published in Central European Economic Journal (CEEJ) that addresses a question still central to both academia and practice:

Do ESG disclosures translate into improved financial performance?

Set against the backdrop of increasing climate-related risks and growing emphasis on sustainability, the article examines companies from the Central and Eastern European (CEE) region over the period 2017–2021.

Using panel regression and cross-sectional analysis, the study investigates the relationship between ESG disclosure (Environmental, Social, Governance) and firms’ financial performance.

📊 The results indicate a positive association between ESG disclosure and ROA. The relationship appears particularly strong for firms operating in the financial sector compared to other industries.

The findings contribute to the ongoing academic and policy debate on whether sustainability reporting is merely a regulatory requirement or also a driver of financial performance.

📖 Featured article:

“Relationship between ESG and Financial Performance of Companies in the Central and Eastern European Region” by Karolina Siwiec and Renata Karkowska

https://reference-global.com/article/10.2478/ceej-2024-0013

As ESG frameworks continue to evolve, so does the relevance of empirical evidence from emerging and transitioning markets.

02/06/2026

One of the pleasures of academic life 📚 is that, every so often, a paper arrives that reminds you economic research is still capable of asking genuinely civilizational questions.

Most papers add another careful brick to an already well-constructed wall 🧱
Occasionally, somebody walks in and asks why the wall exists at all.

Our latest issue of the Central European Economic Journal includes one of those papers:

“Why States Exist: The Square Law Theory of the State” by physicist and mathematical cosmologist Frank Tipler.

Tipler is best known for highly ambitious work spanning general relativity, cosmology, physics, probability, and philosophy — which perhaps explains why this paper reads less like conventional economics and more like an attempt at a unified theory of political organization.

The argument is strikingly simple:

States emerged because concentrated force scales.

Drawing on the classical Lanchester equations ⚔️, the paper argues that military effectiveness increases approximately with the square of coordinated force. Under many conditions, an army twice as large is not twice as powerful but four times as powerful.

Or, as military history repeatedly suggests:
history favors whoever arrives “first with the most men.”

For roughly 140,000 years, humans lived without states 🌍
States appear only after agriculture 🌾, cities 🏛️, food storage, taxation, and standing armies become possible.

The same granaries that fed cities also fed armies.

The paper then makes an unexpectedly Coasean move:

if firms exist because hierarchy reduces transaction costs, then the state itself can be understood as a firm whose comparative advantage is organized force.

What makes the article especially refreshing ✨ is its willingness to move freely across disciplines: military mathematics, economics, political theory, organizational theory, history, and technology all appear in the same conversation.

The conclusion is perhaps the most provocative part 🤖

If states arose because technology favored concentration of force, future technologies — drones, cyberwarfare, autonomous systems, decentralized intelligence networks — may eventually weaken that advantage.

In the paper’s memorable phrasing:
firms whose product is violence may someday become as obsolete as firms producing buggy whips or slide rules.

Whether one agrees entirely or not, it is difficult not to admire the ambition of the attempt.

://reference-global.com/article/10.2478/ceej-2026-0007

01/06/2026

📚 Monday Alphabet Series — T is for: Total Factor Productivity (TFP) ⚙️📈

The most elegant way economists say:

“We accounted for labor, capital, education, institutions, demographics, trade, geography, infrastructure, and technology…

and there’s still something mysterious making one economy richer than another.”

That mysterious residual?

✨ Total Factor Productivity.

In growth economics, TFP is often interpreted as:

innovation 💡

efficiency ⚡

organizational quality 🏛️

technological diffusion 🌍

managerial know-how 📊

or, occasionally,

“things happening in the regression we cannot fully explain” 😅

Robert Solow famously showed that a large share of long-run economic growth could not be explained merely by adding more labor or capital.

Economists then collectively responded:

🧠 “Excellent. Let us dedicate the next 70 years to debating the residual.”

Modern papers now connect TFP to everything from:

state capacity,

trust,

institutions,

AI adoption,

culture,

trade networks,

infrastructure,

and even historical railways from the Austro-Hungarian Empire 🚂

Because in economics, if something matters but is hard to measure…

…it eventually becomes productivity.

CEEJ Monday Alphabet Series 📚

29/05/2026

📉💡 The Predictability of High-Frequency Returns in the Cryptocurrency Markets and the Adaptive Market Hypothesis

by Jacek Karasiński, PhD

Before “crypto volatility” became a daily headline, researchers were already asking a deeper question: Are cryptocurrency markets actually efficient?

In “The Predictability of High-Frequency Returns in the Cryptocurrency Markets and the Adaptive Market Hypothesis,” the authors examined intraday data for the 16 largest cryptocurrencies to test just how predictable these markets really were.

The findings?

🔹 Most cryptocurrencies were unpredictable most of the time

🔹 Efficiency changed over time — supporting the Adaptive Market Hypothesis

🔹 Market inefficiencies became more visible at higher trading frequencies

🔹 Not all cryptocurrencies behaved equally efficiently

One particularly interesting takeaway: the faster the trading frequency, the more cracks appeared in market efficiency. Good news for algorithmic traders perhaps… and a reminder for regulators that “efficient markets” may depend heavily on the clock speed.

A fascinating example of how financial theory meets the realities of digital assets — and how crypto keeps challenging traditional assumptions in economics and finance.

https://reference-global.com/article/10.2478/ceej-2025-0003

27/05/2026

📢

Mapping the Policy Priorities of European Union Citizens: Evidence from the NextGenerationEU Programme

by Natalia Melgar

When the European Union launches a historic recovery programme worth hundreds of billions of euros, an important question follows naturally:

👉 Do citizens actually think the money is going where it should?

This new article explores the gap between what Europeans believe the EU is prioritising under the NextGenerationEU programme and what they want the EU to prioritise instead.

Using Eurobarometer 99.4 data (2023), the paper combines descriptive analysis, probit and multilevel models, and cluster analysis to map policy preferences across EU member states. The results reveal a remarkably consistent pattern across Europe:

🇪🇺 Citizens would like to see stronger investment in:

🏥 healthcare

🎓 education and youth training

💼 better working conditions and job quality

than they currently perceive the EU to provide.

The study also finds that policy priorities are shaped less by national macroeconomic indicators and more by individual-level characteristics such as education, age, gender, and labour market status.

In other words: debates about EU legitimacy may depend not only on what institutions do, but also on whether citizens feel their priorities are being heard.

At a time when discussions about strategic autonomy, competitiveness, social cohesion, and the future of European integration are intensifying, the article offers an important reminder:

public support for large-scale European policies is not automatic — it is closely tied to perceptions of fairness, visibility, and alignment with societal expectations.

📖 Read the article, share your thoughts! https://reference-global.com/article/10.2478/ceej-2026-0006

25/05/2026

S is for ... Sunk Cost Fallacy — the reason people stay in bad projects, toxic partnerships, and subscriptions they forgot to cancel in 2019. 📉

In economics, a sunk cost is money, time, or effort already spent and impossible to recover.

Rationally? It should NOT influence future decisions.

But humans love emotional accounting:

“I’ve already invested too much to quit now.”

And just like that:

🚧 Failed ventures continue

📊 Companies throw good money after bad

🎬 People sit through terrible movies because they paid for the ticket

Behavioral economists study this because markets are not driven by spreadsheets alone — they’re driven by ego, fear, hope, and commitment bias disguised as “strategy.”

The smartest economic decision is sometimes:

Cut the loss. Ignore the past. Optimize the next move.

Simple in theory. Brutal in practice.

22/05/2026

📌 How to create an engagement-friendly environment in reward-based crowdfunding?

by Marcin Bielicki and Rafał Rydzewski

Crowdfunding is often framed as a game of great ideas meeting willing wallets.

But this paper suggests something more interesting: it’s also a game of engineered engagement.

We examined the top 30 most funded Kickstarter campaigns in tabletop games, asking a simple but stubborn question:

👉 What do top creators actually do to keep backers active, involved, and coming back?

Using the Theoretical Model of Customer Engagement and Theory of Intrinsically Motivating Instruction, we built a backer engagement-based framework that maps how participation is sustained over time.

The findings are surprisingly consistent across winning campaigns:

🎯 Successful creators design shorter, more dynamic campaigns

🎯 They actively shape participation, not just funding

🎯 They link value creation with community involvement

🎯 And they treat backers less as audience—and more as collaborators

But one factor quietly dominates the rest:

💬 Social interaction

Not as a side feature. As the actual infrastructure of engagement.

In practice, the strongest campaigns don’t just ask for support.

They create environments where interaction becomes the product itself.

So the takeaway is less about “how to fund a project”

and more about:

👉 How to design a space where people want to stay involved

https://reference-global.com/article/10.2478/ceej-2022-0003

18/05/2026

Ever heard of R as in ...Revealed Preference Theory? It's one of the cornerstones of modern microeconomics, and understanding it can reshape how we think about consumer choice and behavior.

🔍 What is Revealed Preference Theory?

Developed by economist Paul Samuelson in the 1940s, this theory is all about understanding consumer preferences based on their actual choices in the market—not just what they say they prefer. It’s the idea that the best way to know what someone values is by looking at the decisions they make, rather than relying on surveys or hypothetical scenarios.

💡 Why does it matter?

Real-world insights: It tells us that consumer choices reveal more than just wants—they show true preferences that are shaped by budget constraints, available alternatives, and even psychological factors.

It’s empirical: This theory moves beyond theory and abstract models to the practical, observable world of actual consumption behavior.

Helps us predict behaviors: If we can track people’s choices, we can predict how they might act in future scenarios, making it vital for businesses, policymakers, and even governments in designing effective interventions.

In short, while traditional economics often assumed that we could directly ask consumers what they wanted, Revealed Preference flips that idea on its head—actions speak louder than words!

For those of us working with data and consumer behavior, Revealed Preference Theory is a powerful tool for understanding and forecasting demand, pricing, and preferences across industries—from tech to retail.

15/05/2026

📚 to a timeless question in environmental economics: Do people really tell the truth in surveys about public goods? 🤔

In her thought-provoking paper, Ewa Zawojska explored why consequentiality matters in contingent valuation surveys — because respondents are more likely to reveal their true preferences only when they believe their answers can actually influence policy outcomes.

The study shows that:

✔️ believing your vote matters is key to truthful responses,

✔️ perceived chances of project implementation and payment collection must align in specific ways,

✔️ and even risk preferences shape how honestly people respond.

A sharp reminder that designing good public policy surveys is as much about psychology and trust as it is about economics.

📖 “A Consequential Contingent Valuation Referendum: Still Not Enough to Elicit True Preferences for Public Goods!” — still highly relevant today for researchers and policymakers working on environmental valuation and public decision-making.

https://reference-global.com/article/10.1515/ceej-2017-0012

Central European Economic Journal

08/06/2026

05/06/2026

02/06/2026

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29/05/2026

27/05/2026

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