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Public debts in the world - analysis of public finances focusing on G-20 countries
Matějka, Jan ; Jílek, Josef (advisor) ; Běláčková, Vendula (referee)
This thesis deals with the problem of public debt within the G-20 countries and the Czech Republic. The current state of public finances in these countries was analyzed through the so called Public Finance Checklist, which has been specifically developed for this thesis. The Checklist includes some public sector liabilities that are not a part of the conventional analysis of public sector debt. The results of analysis show that hidden liabilities constitute a significant part of the total amount of public debt in the analyzed countries. This fact presents a threat to stability of public finances. While the total public debt is increasing, governments aim to optically decrease the level of debt. The author assumes that the reason for such behavior is the arrangement of political system with missing corrective mechanisms of the principal-agent problem and moral hazard put into effect by political representatives. At the end of the thesis the author suggests some methods to fix the problems and restrict the growth of public debt.
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Should common economic policy be implemented in Eurozone?
Chlivényiová, Eva ; Čajka, Radek (advisor) ; Kalínská, Emílie (referee)
The aim of this thesis is to define issues related to the implementation of common economic policy in Eurozone and put it into context of wider economic and political coherency. The thesis is divided into six chapters, whereas first two chapters were dedicated to the beginning of integration process and to the later relationship of integration and globalization. Following chapter describes the principles of economic policy. Important part of this thesis is focused on financing of common European budget, taxes and minimum tax rate. Finally, there is description of actual point of view on Eurozone.
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Fiscal policy of the Ukraine
Tomashevskyy, Volodymyr ; Soukup, Jindřich (advisor) ; Rusmichová, Lada (referee)
The subject of the diploma paper/dissertation "Fiscal policy of Ukraine" is the analysis of the development of fiscal policy of Ukraine and its influence on the economical situation of the state. At the beginning, in the first part, we briefly define fiscal policy, its goals, functions, forms and tools. The diploma paper then characterizes the budgetary scale of Ukraine focusing on the separate items of the state budget. In the last part, the experiental one, we analyse the periods of the development of fiscal policy in Ukraine from the year 1991 and the influence of the main measures of the Ukrainian government on the macroeconomical indices.
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The Influence of Monetary and Fiscal Policy on Business Cycle
Pikhart, Zdeněk ; Czesaný, Slavoj (advisor) ; Rybáček, Václav (referee)
The purpose of this diploma thesis is to examine the impact of monetary and fiscal policy upon business cycle and the long term growth on the example of Swiss economy. The research approach is the analysis of monetary and fiscal indicators related with gross domestic product. Theoretical part explains business cycle theories, which consider cause of economic fluctuations in monetary and fiscal policy and further describes stabilization role of this particular policies and develop relevant problems within it. In practical part there is conducted research of monetary and fiscal influence upon Swiss business cycle with eligible indicators. The final part summarizes the most important knowledge and provides appropriate recommendations to reduce cyclical volatility of the product and to create a suitable economic and political framework for a functioning economy in the long term.
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Fiscal Policy of Russian Fedeartion
Makarov, Daniil ; Soukup, Jindřich (advisor) ; Rusmichová, Lada (referee)
This bachelor thesis deals with the fiscal policy of the Russian Federation. The first section describes the theoretical background of the issue, such as the basic definitions and relations concerning the fiscal policy of the state. The next section discusses the structure of the public budgets of Russia and its' dynamics during the last few years, which tends to be a very interesting topic, since it is possible to observe the impact of the global financial crisis and the government's response to this problem. The work continues with the analysis of the impact that the presidential campaigns can have on the state budget and how much the company can affect the country's revenues by reimbursing of the previously unpaid taxes. In the end the paper examines the government's key fiscal measures such as the creation of the stabilization fund and the change of rates of the value added tax.
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Is common fiscal policy an essential condition for the functioning of the optimal currency area?
Fehér, Richard ; Mládek, Josef (advisor) ; Štěpánek, Pavel (referee)
This thesis deals with the adjustment mechanisms, which should mitigate the effects of assymetric shocks in monetary area. According to the theory of Optimum Currency Areas (OCA), synchronization of business cycles has been observed as the cause of assymetry. Primarily we focused on the functionality of the adjustment mechanisms in the countries of Economic and Monetary Union (EMU), whereas the impact of recent crises has shown that these mechanism do not work sufficiently. One possible reason is the fact, that in EMU there is no risk-sharing mechanism through fiscal transfers. Therefore, the work deals with fiscal policy in euro area, its possible reforms and offers the concept of fiscal federalism as one of the possible models for the fiscal structure in EMU. We analyzed how fiscal systems in the U.S., Australia and Canada were performing during recent crisis and how they could be an inspiration for prospective reforms in EMU.
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Evaluation of the previous policy of the ECB in terms of its impact on national economies of the eurozone
Kleštinec, Ivan ; Mandel, Martin (advisor) ; Brůna, Karel (referee)
The ECB was established during the third phase of the economic and monetary union and its activities launched on 1. 7. 1998. It has become a new independent institution whose primary task became the conduct of monetary policy for countries that have accepted the euro currency. This bachelor thesis examines the impact of monetary policy in selected countries of the euro area. ECB affects individual national economies using its strategies and instruments, such as interest rates, minimum reserve requirements or change over the amount of money in circulation, whether through expansive or restrictive policy. It tries to act counter-cyclically to stabilize the price level and economic growth or to promote it. Monetary policy is the same for all countries, although the results are different because every country in the euro zone determines its own fiscal policy.
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Měnová politika a její synchronizace s fiskální politikou: vliv na hospodářský růst a inflaci
Řežábek, Pavel ; Schwarz, Jiří (advisor) ; Holman, Robert (referee) ; Komárek, Luboš (referee) ; Šimáček, Milan (referee)
The dissertation deals with the interplay of fiscal and monetary policy in face of uncertainty about the estimation of the true output gap. Theoretical framework of the dissertation set this interplay of monetary and fiscal policy into the realm of game theory, in particularly non-cooperative games of the Nash and Stackelberg equilibrium, respectively. The theoretical framework continued with a description of various methods used for estimation of potential output and output gap, with a special emphasis on methods used in both the Czech National Bank and Czech Ministry of Finance. In the applied part of the dissertation, I studied the interplay of monetary and fiscal policy in the case of Czech economy facing an uncertainty about the estimation of the true output gap. I studied the impact of this interplay on major macroeconomic variables and I tried to determine, which of these two policies plays the role of a leader and which plays the role of a follower in the case of Czech economic environment.
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Kvantitativní analýza interakcí fiskální politiky a reálné ekonomiky v České republice
Valenta, Vilém ; Hronová, Stanislava (advisor) ; Arlt, Josef (referee) ; Slačálek, Jiří (referee)
After many decades, macroeconomic effects of fiscal policy have returned to the centre of the economic policy debate. Both automatic fiscal stabilizers and discretionary fiscal stimuli have been used to support aggregate demand during the recent global economic crisis with a subsequent need for large-scale fiscal consolidations. In this context, a proper assessment of the size of automatic fiscal stabilizers and fiscal multipliers represents a key input for fiscal policymaking. This dissertation provides a quantitative analysis of the interactions between fiscal policy and real economy in the Czech Republic. The impact of real economy developments on public finances is assessed based on the methods of the OECD, the European Commission and the ESCB for the identification of general government structural balances, i.e. balances adjusted for effects of the economic cycle and net of one-off and other temporary transactions. I find that the underlying fiscal position, as approximated by the government structural balance, was mostly below the level stabilising the debt-to-GDP ratio since mid-1990s. An indistinct improvement in the structural balance can be identified in the period 2004--2007, which was subsequently reversed by the adverse structural impact of the world economic crisis. At the same time, dynamics of unadjusted fiscal balance was largely determined by one-off transactions in the past. The effects of fiscal policy on real economy are analysed using the structural VAR approach. I find that an increase in government spending has a temporary positive effect on output that peaks after one to two years with a multiplier of around 0.6. Tax multiplier appears to be small and, in contrast to standard Keynesian assumptions, positive. Government spending is supportive to private consumption, contradicting the hypothesis of Ricardian equivalence, but it crowds out private investment in the short run. The results should be interpreted with caution, as the analysis is complicated by rapidly changing economic environment in the period of the economic transition, relatively short available time series and a large number of one-off fiscal transactions.
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The Sustainability of Government Deficits: Old Vs. New Europe
Plocek, Tomáš ; Stankov, Petar Valeriev (advisor) ; Potužák, Pavel (referee)
This work analyses fiscal sustainability and position of old and new members of EU and offers some fiscal policy implications to deal with debt reduction in the aftermath of the current fiscal crisis in the EU. Fiscal policy of Old European countries is different from fiscal policy of the new members. Due to different historical development New European members have lower debt and lower GDP per capita. Many policymakers in New Europe tried to increase GDP of their countries by generating government deficits. On the other hand Old European countries are already having large debts and current fiscal crisis is one result of this fact. The recent fiscal crisis in Europe raised the question what is sustainable fiscal policy and how to achieve it. Sustainability of the policy can be divided into three groups: short term, medium term, and long term. In short term, fiscal policy is sustainable, when government is able to issue and sell government bonds. Otherwise it defaults. In medium term, fiscal policy is sustainable when debt to GDP ratio is constant or decreasing. Situation in long term is very similar to situation in medium term. The difference is in time. Long term fiscal policy is sustainable if debt to GDP ratio converges to some finite number. All the definitions are problematic and problem arises basically from fact that variables that are part of the definitions are volatile. Fiscal policy that might seem to be sustainable in times of economic expansion may become unsustainable even in short time. Exactly this thing happened in Ireland. Ireland shows another problem of sustainability definitions. The problem is that private debt can increase public debt and even threaten its sustainability. Many countries were saving their financial sector which was very expensive and this practice is increased the debt in those countries very fast. Probably the most important indicator of fiscal sustainability is interest rate on government bonds. Reason is that price of the bonds is based on different risks that are in the assets. Countries with sustainable fiscal policy are paying lower interests than countries with unsustainable. This is reason why we tried to explain variation of interest rate on 10 years government bonds by empirical models. Two models were based on fixed effects panel data estimations and one model was based on ordinary least squares model. The panel data model showed that there was and still is huge difference between Old European and New European countries. Old Europe was viewed by markets as one segment which is relatively risk free. This lead to situation, that most important factor driving interest rates in Old Europe is the risk free rate on the German bonds. On the other hand, interest rates in New European countries are influenced by many more indicators. Most important indicator in New Europe is GDP growth and sustainability of foreign exchange reserves. Based on results of the model we came to conclusion that there is high chance that markets will start to differ among Old European countries and this could lead to increase of interest rates in some Old EU members, a conclusion which is to some degree being verified by the increased spreads between German government bonds on one hand, and Italian and Spanish bonds on the other hand in the first few weeks of August 2011. Our conclusions also suggest that the position of New Europe may stand similar in current situation. If it is true policymakers may try to adapt policy of New European countries to increase its sustainability and improve the key variables. The conclusions from this work bring several policy recommendations for improving the fiscal sustainability in Europe. First and probably the most important recommendation to fiscal policy is that policymakers should not underestimate the indicators of fiscal sustainability, which was a common practice in recent history. Countries with high GDP growth were generating large deficits and debt to GDP ratio was constant. Problem is that in recession indicators that were influencing interest rate changed and fiscal policy become unsustainable in many cases. Conclusion for fiscal policy is that policymakers should run responsible fiscal policy in good times to avoid troubles in bad times. Governments should also understand full price of deficits, because increased deficits also increase interest rate that governments have to pay on existing debt.
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