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Monetary policy of the Federal Reserve System during financial and economic crisis
Babušák, Martin ; Mandel, Martin (advisor) ; Kodera, Jan (referee)
The aim of the thesis is to evaluate the effectiveness of measures taken by the Federal Reserve System in response to the 2007 financial crisis that was later joined by economic crisis. It analyzes effects caused by modification of existing programs, creation of new credit programs, support of systemically important institutions by the Fed and programs of outright purchase of selected assets on the open market. The thesis also examines the behavior of the Fed in setting of a target interest rate in longer term, from 2000 to 2011. The thesis verifies the validity of the Taylor rule of monetary policy by using regression analysis. Appendix at the end of the thesis emphasizes the importance of the U.S. dollar in the current international monetary system and the associated implications for the external stability of the U.S. economy.
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Heterogenous economic positions of eurozone members and common policy of ECB
Pekárek, Štěpán ; Pfeifer, Lukáš (advisor) ; Urban, Luděk (referee)
One of the core economic questions of present Europe is european debt crisis. This work focuses on analysis of situation of the Economic and Monetary Union of the EU using Taylor rule model. Outcome of the analysis is confirmation of hypotesis about a heterogeneity among member states concerning monetary policy. Optimal interest rates of individual states according to Taylor rule are not homogeneous and diverge from interest rate of European Central Bank. This signifies an heterogeneity in demands on common monetary policy. There are two groups of countries identified according to the extent of heterogeneity - periphery and core countries. Further this work builds up on the findings of model and discusses in depth their connections with current problems of monetary union. There are chosen three main areas: credit expansion, public finance and single currency.
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Je Taylorovo pravidlo příliš jednoduché pro praktické využití v malé otevřené ekonomice jako je Česká republika?
Juračka, Tomáš ; Mičúch, Marek (advisor) ; Potužák, Pavel (referee)
The Taylor rule and its variants played a prominent role in the monetary policy discussion among theoreticians and practitioners for more almost two decades. The purpose of this thesis is to assess on the applicability of the simple instrument rules such as a classic Taylor's rule to the Czech economic environment which can be described as a small open economy with banking market specifically skewed by excess liquidity. The applicability is evaluated based on the variants of the Taylor rule and their effectiveness in describing the monetary policy of the central bank. The results of the models presented in this thesis are ambiguous. Traditional specification of the Taylor's rule is clearly unsuccessful in describing the behaviour of the Czech National Bank. However, if the models are altered to their historical variants containing only the information accessible at the time of decision making, their robustness and explanatory value increase significantly. Taking interest rate smoothing and exchange rate into consideration further improves the models. The policy behaviour of the Czech National Bank can be best described by the historical model with the one-year-ahead inflation prognosis, output gap, exchange rate and lagged target interest rate as explanatory variables. One of interesting results of this model is that the output gap does not play important role in the Czech National Bank decision making which is consistent with the opinions presented in the Czech National Bank Board Minutes.
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Měnová politika a současná krize: Co lze vyčíst z „minutes“?
Gryčová, Marta ; Hurník, Jaromír (advisor) ; Sedláček, Petr (referee)
Abstract Based on the Romer and Romer (1989) methodology this paper analyzes behavior of the US Federal Reserve System (FED) and the Czech National Bank (CNB) during the recent crisis. It explores minutes and press releases from the meetings of the Bank Board of the CNB and the Federal Open Market Committee of the FED, i.e. on one hand from the side of a small open economy that has been hit mainly through decline in foreign demand, on the other from the side of a big closed economy, in which the recent crisis has originated. It compares reaction in interest rate and adequacy of unconventional measures with a prediction of a simple 'Taylor rule' (Taylor, 1993) and tries to evaluate the adequacy of the overall reaction of mentioned central banks to the crisis.
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US Monetary policy in new millenium: analysis and influences on domestic and global economy
Vaško, Dan ; Neumann, Pavel (advisor) ; Žamberský, Pavel (referee)
This Diploma thesis analyses monetary policy management in USA during the passed decade and proposes some changes regarding the future decision making of central banks. In particular, a considerable deviation of the actual monetary policy from the Taylor rule right before the housing bubble was proved by an econometric model. As a consequence, too low interest rates in this period caused significant higher magnitude of real estate prices. However, it can be said that monetary policy was not the main cause of the creation of this bubble. Regarding the FED's reaction on financial crisis, new perspectives are provided. According to this study, credit risk is thought to have been the main cause of financial stress. This is in contradiction with FED's measures that were mainly focused on lack of liquidity in financial markets. Last but not least, this thesis argues that nowadays, international development should be more reflected in monetary policy decision making.
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Causes of the Mortgage Meltdown and Reasons of the US Financial Crisis in 2007 - 2008
Bukva, Bondy ; Dočkal, Dalibor (advisor) ; Urban, Luděk (referee)
The major goal of this work is to conduct a careful analysis of the 2007 -- 2008 mortgage crises, with focus on both the United States financial and mortgage markets. The actual 2007 -- 2008 collapse wasn't only a typical market crash. It was also a "collapse" of ideals and new methods that came to life particularly during the times of the Great Moderation. In this work I further examine three particular issues. These are: economic and political decisions, the psychology of continuous and sustainable growth and the creation of so called toxic assets. Also in tandem to and related with a monetary policy and moral hazard analysis, I try to fully comprehend the actual market bust of the late 2000s. The purpose of my analysis is then finding out if there was a single cause of the market crash of 2007 -- 2008 or if there actually were multiple factors leading to the slump.
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