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The analysis of the cyclically adjusted budget balance
Mareš, Michal ; Bisová, Sára (advisor) ; Kadeřábková, Božena (referee)
The thesis analyzes the cyclically adjusted budget balance on the data of the Czech Republic between 2004 and 2014. There is a big demand to consolidate public finances and the aim of this study is to assess whether this appropriate indicator is convenient to achieve the fiscal responsibility of individual countries. At first, the CAB is estimated by using the method of the European Commission, it is called a production approach on the basis of Article Denis, Morrow, Roger (2002). The work is also based on the article written by Bezděk, Dyczak , Krejdl (2003), which compares the OECD method with the ESCB method. Afterwards the calculation is performed by a modified procedure, using the Hodrick-Prescott filter instead of the production function to estimate potential output. The analysis shows the complexity of the estimation of the parameter which is given by great demands on the input data and arbitrariness. The CAB is discussed not only methodologically but also in its practical use in the context of the economic situation in Europe.
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