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The Effect of Local Policy on Local Parliamentary-Election Results
Vlčková, Kateřina ; Šťastná, Lenka (advisor) ; Baxa, Jaromír (referee)
The thesis examines the relationship between the local policy and local parliamentary election results in Czech municipalities of extended scope from 1997 to 2013. We study the election cycle in subsidies and the impact of higher subsidies to the share of votes for the current ruling party. Besides, we analyse the effect of higher spending to the share of votes for the mayor's incumbent party in parliamentary elections. We test specific expenditure subgroups, such as transportation, education or leisure activities. We apply the system GMM to identify the election cycle in subsidies, while we use 2SLS and instrumental variables to test the effect of higher subsidies and higher spending prior to the elections. In general, municipalities obtain higher subsidies per capita in electoral years. If the mayor is affiliated with the current ruling party on the national level, the ruling party is rewarded for higher subsidies per capita in pre- electoral years by a higher share of votes in parliamentary elections. The mayor's incumbent party obtains a higher share of votes in parliamentary elections as well with higher capital expenditures on education and environmental protection in the pre-electoral year. JEL Classification D72, H71, H72, C23, C26 Keywords Political budget cycle, local policy, subsidies,...
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Behavior and institutional change
Baxa, Jaromír ; Kouba, Karel (advisor)
The main aim is to explain, why we can observe strong persistence in human or firm behavior despite substantial change of economic environment and why persistence of informal institutions occurs. During recent two decades there were various trials to provide explanation of persistence of behavior based on presumption of existence of path dependency and increasing returns, reflecting findings of experimental economics with methodological background in bounded rationality or using simulations of interactions or networks. My practice is slightly different as I'm trying to incorporate findings of cognitive psychology and social cognitive learning into economics. Cognitive psychology implies that behavioral regularities, routines, are based on subjective mental models. Evolution of behavior can be now understood as evolution of routines and mental models, and thanks to their nature routines have high propensity to long persistence despite changing environment. This approach is applicable to evolution of informal institutions and it allows to explain persistence of them using shared mental models. Then informal institutions are seemed as behavioral regularities used by decisive part of the society and their evolution can be now described as diffusion of new behavioral regularity in the society and modeled using...
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The Importance of Non-Price Competitiveness: Oil Downstream Sector in Europe
Sláma, Ondřej ; Baxa, Jaromír (advisor) ; Paulus, Michal (referee)
This thesis investigates the role of price and non-price competitiveness factors using a relative export price index, introduced by Benkovskis and Wörz (2016), that is adjusted for changes in quality and taste. First, we replicate their model employing an updated dataset, confirming previous results. Then, the framework is used to study the recent developments in the Europe's oil product market. Given the saturation of the market, decreasing demand, and converging prices, importance of non-price competitiveness factors, such as quality, increases. The results suggest that the problems of the underinvested oil downstream industry in Northwestern European producers are caused not only by decreasing aggregate demand, high costs, and low margins, but by non-price competitiveness factors as well. We find profound improvements in product quality in CEE countries, following substantial investments into the sector and market consolidation. Both regions are at risk of rising imports of high-quality products from the Middle East, Russia and USA. This thesis provides a comprehensive picture of price and non-price competitiveness developments of all players in the highly competitive European oil downstream market.
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The Cross-Country and Cross-Sectoral Study of TFP and its Determinants
Bogren, Michael ; Semerák, Vilém (advisor) ; Baxa, Jaromír (referee)
This paper examines the impact of R&D and share of merchandise exports on total factor productivity in the 15 OECD countries through 1996-2009. The paper also discusses the inclusion of the human capital variable in influencing the TFP. The domestic R&D stocks are based on domestic industry-specific R&D. The share of merchandising exports is sector- invariant. We use the random effects to control for unobserved heterogeneity. In this case, the unobserved heterogeneity reflects the differences in trade and R&D policies. The main findings we have obtained are: i) the R&D stocks have a positive impact on TFP based on the random effects model, ii) the exports have a positive and significant impact on TFP, especially in the manufacturing sector.
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The Exchange Rate Pass-Through at the Zero Lower Bound: The Evidence from the Czech Republic
Šestořád, Tomáš ; Baxa, Jaromír (advisor) ; Novák, Jiří (referee)
The paper examines the hypothesis that the devaluation of the domestic currency leads to the higher exchange rate pass-through at the zero lower bound since the interest rate channel cannot offset effects of the depreciation in that situation. Time-varying vector autoregression with stochastic volatility is used to identify the development of the pass-through. The hypothesis is tested on the Czech dataset because the Czech Republic is considered as the prototypical small open economy with inflation targeting. The assumption of higher pass-through to consumer prices at the zero lower bound is rejected. Obtained results confirm that the deprecation stimulates output growth slightly more when the interest rate is close to zero. Our estimations imply that the exchange rate commitment of the Czech National Bank increased the price level by 0.116 % and contributed to the output growth by 0.781 %.
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The Role of Income Tax Progressivity in GDP Smoothening: Empirical Analysis
Žofák, Pavel ; Baxa, Jaromír (advisor) ; Cahlík, Tomáš (referee)
This thesis studies the relationship of income tax progressivity and output volatility. Using our dataset of 31 OECD countries and Bayesian model averaging (BMA) approach to address the model uncertainty issue, we find positive evidence that higher income tax progressivity leads to lower output volatility. This effect is robust to different prior specifications in BMA and to different tax progressivity measures, including our newly constructed measure which is based on the slope of the average tax curve. We also find a strong effect of tax progressivity on the consumption volatility and the volatility of hours worked which we see as the main channels for the reducing effect of tax progressivity on output volatility.
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Identifying the Conditions of Instability in Macromodels of Financial Cycles
Zenáhlík, Aleš ; Baxa, Jaromír (advisor) ; Komárek, Luboš (referee)
The purpose of this thesis is to construct an endogenous macroeconomic model explaining the cause of financial cycles and systemic instability based on the financial instability hypothesis (FIH) published by Hyman Minsky (1982). FIH maintains that capitalist financial systems have an inherent disposition to fi- nancial instability because periods of economic prosperity encourage borrowers and lenders to be increasingly reckless which in turn lead to the formation of financial bubbles. The problem is approached by employing an adaptive ex- pectations model based on stylized facts from Kaldor's and Kalecki's models with addition of behavioral equations implemented in an attempt to simulate market expectations. JEL Classification E02, E11, E32 Keywords Instability, Macromodel, Cycles Author's e-mail ales.z@hotmail.com Supervisor's e-mail jaromir.baxa@fsv.cuni.cz
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Effect of minimum wages: do regional data tell a different story?
Májková, Tereza ; Baxa, Jaromír (advisor) ; Pertold-Gebicka, Barbara (referee)
This thesis examines the effects of an increase of minimum wage level on unemployment, employment, disposable income and risk of poverty. We contribute to the existing literature by directly comparing results resulting from two similar datasets, one working with national, one with regional data. We use different sets of explanatory variables to see whether they affect the results of the estimation. On national level, our results confirm positive effect of minimum wages on employment of adults and on disposable income - but these findings were not confirmed on regional level. With respect to the regional perspective, the results are however subject to substantial uncertainty and are prone to substantial sensitivity to empirical specification. We attribute this uncertainty mainly to the quality of the data - small number of observations together with large heterogeneity. JEL Classification E02, E24, J08, J30 Keywords minimum wages, employment effect, disposable income, risk of poverty, panel data, NUTS 2 regions, comparison Author's e-mail majkovat@gmail.com Supervisor's e-mail jaromir.baxa@fsv.cuni.cz
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The Elasticity of Trade with Respect to Trade Costs: A Meta-Analysis
Tlustá, Anna ; Havránek, Tomáš (advisor) ; Baxa, Jaromír (referee)
The goal of this thesis is to present a meta-analysis of studies that are focused on the relation between the international trade flow and the trade costs. The effect of trade costshasbecomeoneofthekeyelementstoresolvethesixmajor puzzles in the bilateral trade flow. I examine 1,090 estimates of the trade cost effect reported in 58 studies, codify 51 aspects of study design that may influencetheestimates.Iuse meta-regression analysis to investigate why trade costs effects vary. The results suggest that different methods and mainly data characteristics systematically affect the estimated trade costs effects. I find evidence for publication selection bias by using the appropriate tests. The authors of primary studies tend to report preferentially large estimates of the elasticity of trade with respect to trade costs. The evidence for publication selection bias is stronger for studies reported in peer-reviewed journals thanfor unpublished studies.
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