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Fiscal policy in real-time: Role of growth surprises
Kulichová, Vendula ; Baxa, Jaromír (advisor) ; Hlaváček, Michal (referee)
This thesis explores the reliability of real-time estimates of the cyclically-adjusted primary balances. Using fixed effects and weighted least squares models, we show that the real-time estimates are systematically biased and subsequently revised downwards. Moreover, the most important determinants of the revisions are economic conditions and the cyclically-adjusted primary balance revisions are positively correlated with growth surprises. On the other hand, we do not confirm any significant role of institutions and political environment that has appeared in the previous literature. JEL Classification C23, E62, H68, H87 Keywords Real-time data, fiscal surveillance, Stability and Growth Pact, cyclically-adjusted primary balance Author's e-mail 15883947@fsv.cuni.cz Supervisor's e-mail jaromir.baxa@fsv.cuni.cz
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International taxation and cross-border mergers and acquisition
Pokorný, Josef ; Janský, Petr (advisor) ; Baxa, Jaromír (referee)
This thesis studies the effects of differences in the international tax system on the location of target companies and potential tax savings leading from international transactions. Using a large sample of M&A transaction data, we develop a target location choice model and estimate it by a multinomial logistic regression. The results show that differences in taxation of target and acquirer country provide opportunities for tax optimization practices that increase the probability of choosing a target location with higher tax difference. We further evaluate these effect using regression on takeover premium which shows that 1 percentage point increase in difference of effective average tax rate may cause up to 0.5 percentage point increase in takeover premium. The found effects are heterogenous for individual companies and correspond to characteristics of tax-inversions and profit shifting practices. i
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Asymmetric developments in the EU: Is the Lucas Paradox behind?
Štěpán, Jaroslav ; Baxa, Jaromír (advisor) ; Dědek, Oldřich (referee)
Development in European Union is showing that even despite high amount of effort in economic integration, differences in cross-country development are still at play. Indications about Lucas Paradox can be observed, due to inefficient flow of capital. Aim of this study is to quantify, whether this Lucas paradox is present in EU and how it contributes to convergence or divergence between countries. Comparison of panel VAR impulse-response functions is used for evaluation. Results suggests, that Lucas paradox can be identified between Euro area vs non-Euro area countries and Euro area core vs periphery. Furthermore, capital misallocation regarding these four groups prevents possible short-term economic convergence.
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Evaluation of China's FOREX policy: equilibrium exchange rate perspective
Qiriga, ; Semerák, Vilém (advisor) ; Baxa, Jaromír (referee)
Master Thesis: Evaluation of China's FOREX Policy: Equilibrium Exchange Rate Perspective. Author: - Qiriga Supervisor: Ing. Vilém Semerák M.A., PhD. Academic Year: 2018/2019 Abstract This thesis investigated China's foreign exchange policy from the equilibrium exchange rate perspective, using the Fundamental Equilibrium Exchange Rate model with multiregional dimension. The core question is whether Renminbi is misaligned (over- or undervalued) from 2001 to 2017. The result indicated that the bilateral nominal exchange rate of Renminbi against the US dollar was undervalued from 2002 to 2013, reaching a peak of 34.2% in 2007. In the rest of the years, it was overvalued slightly against the US dollar. As to the real effective exchange rate (REER) of Renminbi, it was overvalued in the first three years of the 2000s, then went through the period of undervaluation of 9 years, with a smaller degree compared with the bilateral exchange rate. It is shown that from 2013 the REER of Renminbi had been overvalued for several years until it was undervalued again in 2017 by 2%. Keywords FEER, Renminbi, exchange rate misalignment, multinational model, real effective exchange rate
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Capital Flight from Ukraine: Measurement and Drivers
Marchenko, Yuliia ; Baxa, Jaromír (advisor) ; Paulus, Michal (referee)
This thesis presents estimates of capital flight from Ukraine in the period 1994 to 2017. We use the World Bank Residual method to calculate capital flight as a residual difference between sources and uses of funds in the economy. Our findings show that pre-2014, capital flight amounted to 7.5 billion USD on average. On the contrary, in 2014 our method reports unrecorded capital inflow of 10.7 billion USD, which took place in times of economic recession and military conflict in the east of Ukraine. We analyze the factors that might have caused reverse capital flight, and consider that increase in remittance flows, growth of the black currency market and new niches in the underground economy might have had an effect on unrecorded capital inflows. Finally, we study the components of the World Bank Residual method, and suggest that capital flight might have taken forms that the method doesn't encompass. Therefore, we underline the importance of accounting for gaps in the method by adding trade misinvoicing estimates to capital flight volumes. Keywords Ukraine, Capital Flight, World Bank Residual Method, Balance of Payments, Shadow Economy Range of thesis: 89 886 Characters
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Costs of Conflict: Empirical Analysis of the Economic Situation in Palestine and Israel
Pankina, Anastasia ; Baxa, Jaromír (advisor) ; Semerák, Vilém (referee)
This thesis analyzes the Israeli-Palestinian conflict. Deeply rooted in history, and dominated by mutual violence, the conflict has been causing considerable damage to society, politics and economics for several decades. The latest attempts for the peace negotiations process failed, leading to an escalation of tensions and the Second Intifada in 2000. The Israeli West Bank Barrier has been constructed with an aim to reduce the number of terrorist attacks and to stabilize the situation of the region. By using the synthetic control method, we evaluate the impact of the Second Intifada and the Barrier on GDP per capita. The results indicate that Israel benefits from the West Bank Barrier, in 10 years the country managed to completely recover from the substantial negative effect of the Second Intifada. On the other hand, the West Bank experienced a decline in GDP per capita at the beginning of construction since the Barrier damaged properties located close to the construction and restricted movement of goods and people. A couple of years later the situation stabilized, however, the West Bank was unable to achieve full recovery from the armed uprising of 2000, and the GDP per capita growth remained limited. The estimations for the whole of Palestine reveal a negative impact, that is also attributed to...
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What is the effect of income inequality on economic growth?
Ardeleanu, Dorian ; Baxa, Jaromír (advisor) ; Astapovich, Stanislav (referee)
The impact of income inequality on the level of economic growth is an impor- tant question, but the existing literature did not reach a consensus about the sign of its effect. This thesis studies the impact in 93 countries over the years 1995-2015. We apply two different methods: the fixed effects with Newey and West standard errors, and the first-difference generalized method of moments. The main findings emphasize that a widening wealth gap has an overall negative influence over the real GDP per capita growth. Besides that, the effect is stronger among low-income countries than among high- income ones. Moreover, we find that the impact of income inequality on economic growth depends on the governing party's doctrine. It is negative and statistically significant only in states with centrist governments. 1
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Economic Impact of Margaret Thatcher Revisited
Stuchlík, Jakub ; Baxa, Jaromír (advisor) ; Malovaná, Simona (referee)
Forty years after Margaret Thatcher became the first woman prime minister of the UK, her past actions and reforms remain highly polarizing and influential. Nevertheless, there is general agreement that her government was a game-changing one in many aspects. In this thesis we test whether and to what extent her deconstruction of the Post-war consensus affected the UK's economic performance. We apply the synthetic control method in order to observe the overall economic impact of Thatcher's policies. We find significant evidence that M. Thatcher exploited the output-inflation trade-off, and the decrease of inflation was very much at the costs of a significant increase of unemployment. We have calculated that in case of continuation of Post-war consensus policies the inflation would be on average approximately 2.2% higher and unemployment 2.8% lower in time period 1980-1990.
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Does Foreign Aid Decrease Inequality? Evidence from the Most Recent Data
Umlaufová, Anna ; Baxa, Jaromír (advisor) ; Pleticha, Petr (referee)
Income inequality is an alarming issue affecting especially developing countries, yet very scarce attention is paid to how it is influenced by development aid. This study investigates the relationship, focusing on modern approaches to foreign assistance which have changed considerably since 1999. With a sample of 123 developing countries, the effect is estimated using both static and dynamic panel data techniques while controlling for the Kuznets curve. The results show that robust to method and functional form, development aid neither improves nor worsens inequality. Nonetheless, estimating the model for specific groups of countries in the sample yields different, statistically significant results, while also depending on political environment. JEL Classification D31, F35, C23 Keywords Inequality, Foreign Aid, Panel Data Title Does Foreign Aid Decrease Inequality? Evi- dence from the Most Recent Data Author's e-mail anna.umlaufova9@gmail.com Supervisor's e-mail jaromir.baxa@fsv.cuni.cz
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Do fundamentals matter for government bond spreads in the EU? Evidence from non-linear models
Popaďák, Ján ; Baxa, Jaromír (advisor) ; Čech, František (referee)
This thesis investigates dynamics of determinants of government bond spreads in EMU and non-EMU countries, using non-linear Markov-switching method and Dynamic model averaging. Utilizing Dynamic model averaging we found evidence of three bond pricing regimes - pre-crisis, crisis and post Outright monetary transaction announcements. These three regimes are characteristic for all EMU countries (except Slovak Republic) and Czech Republic. Announcements of OMTs triggered post OMTs announcement regime also in Slovak republic. Third regime is not present in Poland, Hungary and United Kingdom. Moreover United Kingdom has only one regime and is dominated solely by market expectations. We found that there is heterogeneity in the determinants of bond spreads across all examined countries. Moreover we found that spreads are significantly related to market and economic sentiments. JEL Classification F12, F21, F23, H25, H71, H87 Keywords Bond yields, bond spreads, DMA Author's e-mail jan.popadak@fsv.cuni.cz Supervisor's e-mail jaromir.baxa@fsv.cuni.cz
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