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The effects on monetary policy on corporate investment in Finland
Koskenniemi, Niko Henri Joonas
This thesis aims to find out the effectivity of monetary policy on investment activity in Finnish manufacturing firms. Research question is divided into three parts for clarification: 1) what the effect of low interest rates is, 2) what other factors are impacting the investments and 3) what the interaction between monetary policy and these other factors is. To come up with answers to these questions econometric model is built. Interpretation of the results and policy recommendations are presented in the discussion part. Theoretical background for monetary policy and situation of Finnish economy are also presented, as well as literature review of researches of the area.
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Nekonvenčné nástroje monetárnej politiky
Štulrajterová, Eva
This Diploma thesis deals with unconventional monetary policy tools, specifically with quantitative easing and its impact on two macroeconomic variables – GDP and inflation. Unconventional monetary policy has been mostly implemented since last financial crisis broke out in 2008 and has replaced the traditional but inefficient interest rate policy because of low interest rate environment. The main aim of the thesis is to evaluate macroeconomic effects of quantitative easing according to previously empirically estimated effects of QE between 2010 and 2018 and to identify the differences of these effects among three concerned economies – the USA, the United Kingdom and Euro area using linear regression. The question of effectiveness of QE’s impact on macroeconomic variables is answered in accordance with the main findings of the thesis and some related recommendations for future implementation of economic policy are made.
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Determinanty úverovej aktivity v bank-based a market-based systéme
Vinická, Michaela
This master‘s thesis deals with the effect of selected determinants on lending activity with distinguishing of bank-based and market-based financial systems. Empirical analysis by means of panel regression analysis with fixed effects leads to results which show a significant impact of particular bank characteristics on loan activity which is considered as stable even after addition of macroeconomic fundamentals. Apart from the bank specifics loan activity is affected by economic cycle as well. Monetary policy tools, namely central bank total assets and interbank interest rate, were examined within the individual types of financial systems. The working of interest rate channel in the bank based financial system and the influence of the central bank assets in the market-based financial systems were proved.
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The drivers of foreign direct investment in the economies of the Sub-Saharan Africa
Nmadabuchukwu Akwari, Francis
The thesis thoroughly investigates the relationship between the determinants (e.g. infra-structural quality, labour availability, trade openness, inflation and market size) and the foreign direct investment inflow to the Sub-Saharan Africa. The study uses the annual and balanced panel data of ten (10) countries that are randomly selected from the sub regional group in Africa based on similar economic size over a time period from 2011 to 2015. In addition, the study employs the pooled OLS method to test and estimate the relationship among the economic variables involved and Gretl (2017) is used as the sta-tistical software tools to perform the data analysis. The findings of the research study show very clearly that only infrastructural quality has a positive and statistically signifi-cant effects on the foreign direct investment; while other economic variables (e.g. trade openness, inflation and market size) have positive; but statistically insignificant impacts on the foreign direct investment inflow to the economies. In addition, labour availability has a negative and statistically insignificant effect on the foreign direct investment. The conclusion is that the infrastructural quality is the major determinant of the foreign di-rect investment; while trade openness, labour availability, inflation and market size have little or no influence on the foreign direct investment inflow to the sub regional group-ing. Based on this findings, the thesis suggests massive investment in infrastructure; more robust economic integration in the region; pursuit of favourable and reciprocal bi-lateral trade agreement with trading partners; heavy funding for education, training and research and development; implementation of all round Pan Africanist initiative pro-grammes at the national levels that will ensure effective collaboration between African professionals in the diaspora and the local professionals for capacity building of the local experts and implementation of the right balance of the monetary, structural and fiscal policies to drive and sustain the inflow of the foreign direct investment for all round sustainable economic growth and development in the region.
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Vplyv monetárnej politiky na konkurencieschopnosť vybraného odvetvia
Bendíková, Monika
The aim of the thesis is to determine the impact of monetary policy on the industry and also to determine the impact on the specific company characteristics. The panel data drawn from the Amadeus database is used for analysis. This is data of approximately nine thousand companies in the period from 2006 to 2015. The exogenous variables are defined as financial and non-financial characteristics of firms and the indicator of monetary policy is defined as three months interest rate, PRIBOR. The endogenous variables are defined as return on assets, return on equity and profit margin. The models will show whether there is a relationship between the central bank´s activity and the prosperity of the construction industry.
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Oprávněnost intervencí ČNB na devizovém trhu
Hynková, Marie
Hynková, M. The eligibility of the CNB interventions in the foreign exchange mar-ket. Diploma thesis. Brno: Mendel University in Brno, 2018. This diploma thesis deals with the monetary policy of the Czech National Bank after the financial crisis. The monetary policy of the CNB is compared with doings of the Federal Reserve and the European Central Bank. Attention is paid to the monetary policy of the CNB and to the reasons why the CNB has provided inter-ventions on the foreign exchange market in order to depreciate the CZK/EUR ex-change rate. The diploma thesis described in detail foreign exchange interventi-ons, which the CNB acceded on November 7, 2013, and subsequently abandoned them on April 6, 2017. The CNB wanted to influence the impending deflationary development in the country, so the diploma thesis also deals with the consequen-ces caused by the use of this non-conventional tool. The work also evaluates the benefits and costs of foreign exchange interventions. The empirical part of the diploma thesis demonstrates the relationship of inflation and the exchange rate CZK/EUR. There is also an appreciation of factors influencing the development of inflation during the intervention period.
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Quantifying the natural rate of interest in a small open economy: the Czech case
Hlédik, Tibor ; Vlček, Jan
We identify the natural rate of interest in the Czech Republic as the real rate consistent with output at its equilibrium level and inflation at the target. To identify the rate, we use a (semi-)structural model featuring rational expectations and a forward-looking interest rate rule. Compared to the mainstream literature, the model provides a comprehensive set of cross-restrictions with respect to unobserved variables, including that of the natural rate. Furthermore, we argue that the natural rate of interest in a small open economy is a function of equilibrium real growth adjusted for equilibrium real exchange rate appreciation. Our findings suggest that the natural interest rate in the Czech Republic was around 1 percent in 2017. The current decline of the natural rate from its peak in 2015 mainly reflects the renewed appreciation of the equilibrium real exchange rate on the back of robust real GDP growth.
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Spillovers from euro area monetary policy: a focus on emerging Europe
Benecká, Soňa ; Fadajeva, Ludmila ; Feldkircher, Martin
This paper investigates the international effects of a euro area monetary policy shock, focusing on countries from Central, Eastern, and Southeastern Europe (CESEE). To that end, we use a global vector autoregressive (GVAR) model and employ shadow rates as a proxy for the monetary policy stance during normal and zero-lower-bound periods. We propose a new way of modeling euro area countries in a multi-country framework, accounting for joint monetary policy, and a novel approach to simultaneously identifying shocks. Our results show that in most euro area and CESEE countries, prices adjust and output falls in response to a euro area monetary tightening, but with a substantial degree of heterogeneity.
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Firm investment, financial constraints and monetary transmission: an investigation with Czech firm-level data
Babecká Kucharčuková, Oxana ; Pašalićová, Renata
This project investigates the effect of financial constraints and monetary policy on firms’ investment behaviour using Czech firm-level data. The empirical specification is based on the dynamic neoclassical investment model, which explains investment by sales and cash flow. In addition, it includes financial constraints and other factors. We differentiate firms according to their size and type of economic activity. We find that indebtedness and availability of liquidity have significant effects on investment. In the post-crisis period firms obtained less additional credit due to greater riskiness and tended to accumulate more liquidity. Expectations about future GDP growth and business sentiment are positively related to investment. At the same time, we observe considerable heterogeneity of the results across sectors. The impact of the short-term real interest rate is highly significant for firms of all sizes and in all important sectors of the Czech economy, reflecting monetary policy effectiveness.
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Bank credit risk management in the low-interest rate environment
Maivald, Matěj ; Teplý, Petr (advisor) ; Pečená, Magda (referee)
The thesis examines the relation of the low-interest rate environment to the banks' selected credit risk measures with a panel dataset on banks in Eurozone, Denmark, Japan, Sweden, and Switzerland covering the period 2011-2017. It employs a system GMM framework and a combination of bank-related and macroeconomic variables. This study builds on recent literature on effects of low-interest rates on banks' profitability and estimates the following three hypotheses: The potential effects of the low-interest rate on non-performing loans (NPL) ratio, risk-weighted assets (RWA) to total assets ratio, and changes in Tier 1 capital ratio. There are three main results: Firstly, the results suggest that a prolonged period of negative monetary interest rate can affect the NPL ratio and reveal a possible relationship between the 3M-interbank interest rate and NPL ratio. Thus, the thesis does not reject the first hypotheses. However, it rejects these hypotheses in case of the other two ratios. Secondly, the study finds a bank heterogeneity to be a significant determinant of the credit risk. Finally, using recent data, this thesis contributes to the literature focusing on the drivers of the NPL ratio, RWA to total assets ratio and Tier 1 capital ratio, where in case of the latter two the existing research is...
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