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The Impact of Just-in-Time Inventory Management on Business Cycle Severity
Chalupová, Karolína ; Novák, Jiří (advisor) ; Hanus, Luboš (referee)
This thesis examines the impact of the just-in-time management (JIT) on volatility of inventory and the magnitude of inventory recessionary cuts. Firms' inventory is an important macroeconomic variable - prior research shows that a decrease in inventory volatility is likely an important source of the Great Moderation and that inventory cuts are a crucial part of GDP decreases during recessions. My results show that JIT decreases volatility of inventory change and makes the recessionary inventory cuts milder. Combined with previous research, the results imply that likely, JIT is an important source of the Great Moderation and mitigates recessions. I test the hypotheses with quarterly 1975-2014 data on U.S. publically traded manufacturing firms, consisting of 116 JIT adopters and 116 matched control firms.
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Spillovers between low and high risk assets during business cycle
Matyáš, Jan ; Krištoufek, Ladislav (advisor) ; Kukačka, Jiří (referee)
1 Abstract This master thesis examines linkages among bond and stock markets in Ger- many, Austria and Italy. For the purpose of analysis of return spillovers, we use Spillover index framework which enables us to describe development of inter- market linkages over time. The data used in the study includes the period from January 2nd, 1998 to May 23rd, 2017 which allows us to estimate long- term development of spillovers among markets. We find unequal link between stocks and bonds and increase in co-integration of markets during the financial crisis of 2007-2008 with significant persistence after the crisis. Mechanism of transmission of financial shocks among European countries is affected by eco- nomic and political integration of countries. We identify strong interlinkages of markets with substantial influence of Italian assets in transmitting shocks to German and Austrian assets, especially during periods of economic distress. On the other hand, Germany represents an open economy that is increasingly integrated to other markets. Scale of return spillovers is highly dependent on economic situation which is evident from clustering of high spillovers during recessions and a great deal of persistence of these interdependencies. JEL Classification G01, G12, G15, C63, C67 Keywords return spillovers, asset...
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Business cycle in Sweden, Switzerland and Poland during 2000-2015 and solving the recession phase
Hrúz, Dušan ; Czesaný, Slavoj (advisor) ; Dyba, Karel (referee)
The objective of master thesis is the examination of Swedish, Swiss and Polish business cycle in four key areas consisting of internal and external macroeconomic equilibrium, cyclical development indicators and financial stability during 2000-2015 period and analysis of fiscal and monetary policy with respect to anti-crisis measures. The pivotal hypothesis is that Sweden, Switzerland and Poland have managed to deal with Great Recession relatively better than other advanced economies. Theoretical section characterises chosen countries, explains fundamental terms and sets the research framework. The empirical part monitors business cycle by chosen indicators within internal and external equilibrium, cyclical development and financial stability, subsequently evaluates situation before the crisis outbreak and examines anti-crisis measures that have been taken. Empirical section is closed by SWOT which evaluates economic development during 2009-2015 period and serves as tool for main hypothesis verification.
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Working capital management`s effect on profitability
Kaikaryte, Gabija ; Procházka, David (advisor) ; Žárová, Marcela (referee)
The financial state of the most companies was significantly challenged by the last decade. Thus, financial managers must be aware of all factors that can contribute to the firm`s profitability in order to fight unstable economical environment. Working capital management`s effect on profitability has been raised recently and its importance is already known. This thesis aims to dig deeper into the relationship between working capital management and firm`s profitability across different sectors and different time periods. The subject for the empirical analysis are 908 UK manufacturing and 315 construction firms during the period of 2006-2013. The results indicate about the strong negative relationship between working capital, measured as cash conversion cycle (CCC) and gross operating profitability. Thus, it is an indicator that working capital and its characteristics must be included in the firm`s financial planning.
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Marketing costs in a period of economic crisis and after it
Dostálková, Dominika ; Pešek, Ondřej (advisor) ; Brázdil, Stanislav (referee)
This bachelor´s thesis analyses changes in marketing costs depending on the stages of the business cycle. Especially a strategy of firms, which have to face an economic crisis in the years 2008-2013. Thesis sets a target how changed the investments of Czech companies to marketing in the period of crisis. Theoretical part engages in economic cycle, marketing environment and marketing in the period of economic crisis. In practical part are specific costs on advertisement in particular mediatypes in price list costs depending on the macroeconomics indicators. Then there are also analysis on turnover of media agencies and B2B market. From the analysis was found that if macroeconomics indicators decreasing, also marketing costs decreasing and vice versa, exception costs to internet advertising which are in expansion in whole period. Differences in marketing costs was not proved at big companies which produce consumer products, this conclusion was found in case study of five selected companies.
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Misallocation of Human Capital: The Austrian Perspective
Skala, Jakub ; Lebovič, Michal (advisor) ; Bobková, Božena (referee)
Higher education is often considered as one of the safest and most profitable investments in human capital. There are, however, signals that this sector has been experiencing unsustainable economic boom in the United States. This study examines the ability of Austrian Business Cycle Theory to explain the possibility of such boom, i.e. to explain the potential systematic errors in the allocation of human capital. We find that respective allocation is driven by the similar market forces as the allocation of physical capital and hence, that it may fall victim to the same, or similar false market signals, thus creating the cycle of boom and bust. Credit expansion in the sector of student loans can be the trigger then. Furthermore, we study the actual development in this sector and find that empirical evidence provides many reasons to believe that there has actually been unsustainable boom i.e. an economic bubble in the sector of post-secondary education in the United States.
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What Drives the Aggregate Credit Risk: The Case of the Czech Republic
Málek, Jan ; Seidler, Jakub (advisor) ; Doležel, Pavel (referee)
There has been a long discussion about macroeconomic variables influencing the level of aggregate credit risk in the economy. While literature provides both empirical evidence and theoretical explana- tion of the influence of the business cycle on credit risk, the effect of other macroeconomic variables has not been explored sufficiently. In addition, recent literature suggests the existence of a latent risk factor behind aggregate credit risk, which is regularly interpreted as the latent default cycle. This thesis provides in its first part a discussion of potential aggregate credit risk drivers, which have been previously suggested in literature. We verify using a linear regression model whether the effect of these macroeconomic variables is also apparent in the Czech Republic. Results seem to be stable for both different model specifications and different clients segments and are in line with previous studies. The second part of this thesis explicitly models the latent factor that is assumed behind aggregate credit risk by adding an unobserved component to the already existing model constructed earlier in this thesis. The unobserved component can be estimated by applying Kalman filter. We subsequently discuss the sources of the latent component and whether it can be interpreted as the default cycle. The...
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Pro-cyclicality of Fiscal Policy
Málek, Jan ; Zápal, Jan (advisor) ; Martišková, Monika (referee)
There is large evidence that fiscal policy in many countries tends to pro-cyclicality. This phenomenon is often observed in emerging countries but might also be present in developed ones. It is unclear why so many countries follow apparently sub-optimal fiscal policy. First part of this thesis reviews existing literature concerning pro-cyclical behavior of fiscal policy. It shows in which countries and under which circumstances pro-cyclicality has been present. Furthermore, models explaining pro-cyclicality of fiscal policy are introduced. The remainder of this thesis surveys fiscal policy making in Europe. We show that after subtraction of automatic stabilizers from government budget and considering only discretionary part of fiscal policy, pro-cyclicality of fiscal policy is also present.
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Business cycle theory from the point of view of the Austrian school economics
Malárik, Lukáš ; Ryska, Pavel (advisor) ; Kocourek, David (referee)
This bachelor thesis analyzes business cycle theory from the point of view of the Austrian school of economics which sees the main problem in expansion (boom) driven by low interest rates, contrary to mainstream school, which considers the time of recession with insufficient expenditures as the main problem. Therefore, in the first part of this thesis is provided theoretical framework which describes the main features of the Austrian business cycle theory. After the theoretical explanation follows the second, practical, part of the thesis in which I employed the theory from the first part in order to interpret the situation in Japanese economy since 1980 until present. The main reason is that after the bust of 1990 is Japanese economic still not fully recovered in spite of many recovery attempts based on mainstream macroe- conomic approach. At the end of the thesis it is shown that the Austrian business cycle theory is capable of interpreting the economic development in Japan as well as propose solutions that will lead to recovery. 1
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