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Role of Fiscal Policy in the Recent Inflation Shock in the Czech Republic
Řepa, David ; Baxa, Jaromír (advisor) ; Pavlova, Alena (referee)
Following a massive fiscal expansion worldwide during the COVID-19 pan- demic, global inflation suddenly started to upsurge at a long-unseen pace. In- spired by the case of the Czech Republic, a country that experienced one of the sharpest hikes in the price level in the European Union between 2021 and 2023 and whose public finances have been considerably disrupted by expansive fiscal policy, the thesis aims to reveal to which extent both phenomena are related. Using panel data spanning from 1996 to 2022, the Fixed Effects and Common Correlated Effects estimators are applied to several dynamic models in which four alternative measures of fiscal stance are considered and that allow for heterogeneity in the magnitude of the coefficients as well as the presence of common effects in some cases. However, no robust evidence that the relation- ship would be economically relevant in the standard times has been revealed. Consequently, the analysis hence does not reveal a clear fiscal source of the recent inflation shock. Different drivers are likely to have affected it. Addition- ally, evidence of generally strong inflation persistence and a role of openness to international trade are observed. JEL Classification E31, E37, E62, E65, H62, H63 Keywords inflation, fiscal policy, Czech Republic, COVID- 19,...
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Internal and external factors influencing the cost of equity capital
Mokhova, Natalia ; Kožená, Marcela (referee) ; Živělová, Iva (referee) ; Lace, Natalja (referee) ; Zinecker, Marek (advisor)
Náklady vlastního kapitálu, jež jsou ovlivňovány řadou interních a externích činitelů, významným faktorem ovlivňujícím rozhodovací procesy v podnikové sféře. Cílem této disertační práce je na základě primárních a sekundárních dat formulovat původní metodiku řízení nákladů vlastního kapitálu. Zdrojem sekundárních dat je rozsáhlá literární rešerše zahrnující zahraniční a tuzemské vědecké studie a databáze. Primární data, na základě nichž byl zkoumán vztah mezi teoretickými přístupy řízení nákladů vlastního kapitálu a podnikovou praxí, byla získána formou dotazníkového šetření od finančních manažerů působících v podnicích se sídlem na území ČR. Data byla zpracována s využitím statistických metod. Výsledky disertační práce přispívají k hlubšímu porozumění vztahu mezi náklady vlastního kapitálu a jejich determinantů a odhalují rozdíly mezi teorií a manažerskou praxí. Navrhovaná metodika řízení nákladů vlastního kapitálu je určená k použití v podnikové praxi a lze předpokládat její další rozvíjení v rámci navazujících výzkumných aktivit.
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Fiskální kompakt a jeho dodržování v zemích EU
Hýsková, Kateřina
Hýsková, K. Fiscal Compact and its compliance in EU countries. Bachelor thesis. Brno: Mendel University, 2023. The bachelor's thesis aims to evaluate whether and to what extent EU member countries comply with the fiscal rules established by the Fiscal Compact. The work analyzes individual forms of different budget rules and their advantages and disadvantages. Subsequently, the thesis focuses on the development of fiscal coordination within the EU, which preceded the creation of the Fiscal Compact. It focuses more on the content and definition of the Fiscal Compact and observes its implementation in EU countries since 2013. The output of the work is an evaluation of the success rate of compliance with the established rules.
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Fiscal policy and inflation: The case of the Czech Republic
Slaba, Martin ; Kočenda, Evžen (advisor) ; Hlaváček, Michal (referee)
This thesis investigates the relationship between government spending and inflation in the Czech Republic. We estimate a block-restriction VAR model in several specifications. The model confirmed the prediction of the Fiscal Theory of Price Level, that a shock to government spending will produce an inflationary response. However, the impulse responses are in all specifications insignificant or borderline significant. Second part of the thesis utilizes a non- econometric analysis to examine the post-covid inflationary period. The conclusion of this analysis is that the expansionary government spending combined with a tax cut provided the population with significant disposable income at a time when the economic output was compressed and consumption was severely restricted due to the lockdowns. The forcibly delayed consumption lead to an unprecedented increase in savings of both household and firms. The drawdown of these savings once the restrictions were lifted created demand-side inflationary pressures. The supply-side shock that came with the the war in Ukraine only enhanced the already heightened inflation.
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Usage of Fiscal Policy in the Economic Instruments Simulator
TUPÝ, Jakub
This work includes a description of fiscal policy and its utilization in an economic movement simulator. Firstly, it provides an overview of fiscal policy, its strategies, and tools that the government employs to maintain stable economic growth. The theoretical knowledge acquired during the research was then applied in the practical part of the bachelor's thesis. In this section, a diagram was created to illustrate the options available to the simulator's users before proceeding to the next quarter. Additionally, random events are generated and displayed to the users during the simulation process. Each event is accompanied by its theoretical description, the text displayed to the users, its impact on GDP, unemployment, and inflation, which are the main indicators in the simulator, as well as a description of the most effective solutions using fiscal policy tools, complemented by tables with all their combinations. The practical part also contains a general description of the simulator, a description of its passage, a mathematical formula for calculating future values and a visual aspect to give the reader a comprehensive idea of how the simulator works and looks.
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Yield Curve Dynamics and Fiscal Policy Shocks
Kučera, A. ; Kočenda, Evžen ; Maršál, Aleš
We show that government spending does play a role in shaping the yield curve which has important consequences for the cost of private and government financing. We combine government spending shock identification strategies from the fiscal macro literature with recent advancements in no-arbitrage affine term structure modeling, where we account for time-varying macroeconomic trends in inflation and the equilibrium real interest rate. We stress in our empirical macro-finance framework the importance of timing in the response of yields to government spending. We find that the yield curve responds positively but mildly to a surprise in government spending shocks where the rise in risk-neutral yields is compensated by a drop in nominal term premia. The news shock in expectations about future expenditures decreases yields across all maturities. Complementarily, we also analyze the effect of fiscal policy uncertainty where higher fiscal uncertainty lowers yields.
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Default Risk of Greek Government During the Crisis of 2010
Veselý, Oldřich ; Dědek, Oldřich (advisor) ; Báťa, Karel (referee)
Many people have already questioned whether Greece would default: investors, economists, politicians and general public. The Greek debt crisis has also caused a great turmoil in the EU causing fears of its spreading to other countries with poor fiscal situation in Eurozone through bond markets. Finally the rescue package was prepared for Greece consisting of EUR 110 billion loan facility from both Eurozone and IMF. We study the Greek fiscal crisis in the thesis. We try to find its real causes in the historical chapter and we also show the methodology which can be used to assess the credit risk of Greek government using bond market information and CDS contracts information. In the empirical part we study the evolution of the probability of default of Greek government during the debt crisis using parsimonious model based on the bond market information.
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Rule-of-thumb consumers in the New Keynesian framework
Adam, Tomáš ; Baxa, Jaromír (advisor) ; Čech, Jan (referee)
iv Abstract This thesis investigates the effects of government spend- ing on aggregate economic variables in the Czech Republic. The standard RBC and New Keynesian models assume only forward-looking households despite the evidence of a sig- nificant fraction of non-optimizing households. These mod- els do not provide reasonable predictions for the response of consumption: both models predict its fall following a gov- ernment spending shock. Therefore, a variant of the New Keynesian model, where rule-of-thumb households coexist with optimizing households, is used for the analysis. We have found that fiscal policy has a positive impact on output, although government spending multiplier does not exceed one. Also, the impact on consumption is positive for several periods following a fiscal spending shock, which is consistent with the evidence. JEL Classification: C32, E32, E62 Keywords: fiscal policy, fiscal multipliers, fiscal VAR, rule- of-thumb consumers
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