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Role of Foreign Capital Inflows in Economic Development of Pakistan
Ali, Muhammad ; Baxa, Jaromír (advisor) ; Benáček, Vladimír (referee)
This study attempts to ascertain the importance of foreign capital inflows (FCIs) in Pakistan. We do so by first finding the key determinants of FCIs in Pakistan. Secondly, we attempt to investigate the relationship of FCIs with economic growth and finally we study the impact of FCIs on unemployment, poverty and income inequality. FCIs in this study are combination of foreign direct investment, remittances, foreign aid and external debt. Using data from 1973-2008 for Pakistan we found that growth is key determinant of FCIs both in aggregated and disaggregated forms. Moreover, FCIs have positive impact on economic growth in Pakistan. We also found that FCIs do help in reducing unemployment. Impact on poverty and inequality, however, was found to be insignificant. Results suggest that though FCI is beneficial for growth, the spillovers of the growth are not reaching the poor segment of the society. Policy makers should therefore focus on utilizing these foreign resources, especially remittance inflows, to strengthen domestic financial sector, reduce poverty and inequality. JEL Classification F21, F24, F29 Keywords International Capital Flows, Economic growth, Foreign Direct Investment, Remittances, Foreign Debt, Foriegn Aid, ARDL, Poverty Author's e-mail alionline83@yahoo.com Supervisor's e-mail...
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ECB Monetary Policy: "One Size Doesn't Fit All" Problem and Its Impact on Credits Volume
Nedvěd, Petr ; Baxa, Jaromír (advisor) ; Novák, Jiří (referee)
In this work, I analyse inappropriateness of single monetary policy in the euro area and its impact on credit growth for the oldest twelve euro members and a time period spanning 1999Q1-2013Q3. The inappropriateness is expressed by deviations of actual interest rate from Taylor rule prescriptions. The obtained results are in line with a majority of existing literature since they show that the ECB's single interest rate was the least suitable for the so called PIIGS countries prior to the recent economic crisis. The impact of the deviations on credit growth is estimated econometrically by dynamic panel data estimation. The findings confirm my hypothesis that the deviations from the Taylor rule have a significant positive effect on credits volume, i.e. the higher is the Taylor rule prescription above the actual rate, the higher is the credit growth.
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Portfolio investment for individual investors : (portfolio recommendations for three case studies)
Žigraiová, Diana ; Pečená, Magda (advisor) ; Baxa, Jaromír (referee)
The thesis focuses on the portfolio investment area with respect to individual investors. It discusses their investment possibilities and behavioural aspects that may be the cause of deviations in investors' behaviour from rationality and which as well have the impact on forming their investment objectives. On the three investor case studies two qualitatitive methods of asset allocation are studied, eventually dividing the content of their investment portfolios between stocks and bonds. Additionally, the extension to the traditional stock and bond allocation is performed by means of real estate, commodities and art and antiques and its appropriateness is analyzed for each case study investor. At the very end of the thesis a quantitative mean-variance optimization method of asset allocation is mentioned.
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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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Measuring corruption in developed countries
Bajzíková, Anna ; Baxa, Jaromír (advisor) ; Janda, Karel (referee)
The complex issue of corruption has attracted much attention over the last 20 years. The problem was analyzed mostly in the context of developing and transition countries, though not only the recent financial crisis showed the severity of corruption also in the world's most developed countries. This thesis analyzes twelve currently available corruption assessments for a cross section of 39 developed countries in the period 2007-2010. The thesis categorizes these assessments into three basic generations and characterizes the weaknesses and limitations of particular methods. The analysis is based on determination of relationship between individual corruption measures and recognizes specific aspects of corruption actually measured by particular indices. With the exception of strictly opinion poll-based corruption indices, the first and the second generation of corruption indices correlate well for a set of developed countries. This indicates that the sector specific indices, e.g. expenditure corruption assessment, are in analyzed countries closely related to the overall political corruption levels. An applied hierarchical cluster analysis gives better picture of otherwise inconsistent developed countries corruption rankings and divides countries into ten homogeneous groups. However, the analysis...
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Impact of Potential EU Membership on Economy of Ukraine
Jascuk, Milana ; Cahlík, Tomáš (advisor) ; Baxa, Jaromír (referee)
Recently the topic of the future of Ukrainian economy has been attracting great attention among economists and politicians. The way how it should develop is widely discussed on the international arena. Economists and politicians cannot reach an agreement to which direction it is better to move for Ukraine. Nowadays a lot of special institutions have been created on both sides: in Ukraine and in Europe. The main goal of those is to control all the processes of transformation to be transparent on all levels; as well as prevent unlikely events. Of course, there are proponents and opponents of the moving to the free trade with the EU as for every global process. Among the young generation it is very clear, that possibilities, which gives us European Union are much more valuable and gainful. Even now, majority of students and researchers seek to apply or acquire some knowledge in European countries. I'm not an exception and for this reason, being a representative of young generation, I will try to determine potential impact on Economy of Ukraine assuming integration to European Union. It is very important to consider both threats and benefits of such processes as they are taking place on very high level. Therefore, in this work it will be considered both contours of development for Economy of Ukraine....
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Microeconomic models of centrally planned economies
Svoboda, Svatopluk ; Hlaváček, Jiří (advisor) ; Baxa, Jaromír (referee)
Bachelor thesis deals with centrally planned economies and with methods of modelling of these economic systems. In its first part it generally describes problems of trying to model the centrally planned economy itself and it formally desrcibes situation in which a comunist producer finds himself. Ii also presents a model of producer behavior that is particular for economies with central planning, encountered widely in practice and confirmed by empirical studies. In the next part, various ways available for planning centre to motivate/demotivate producers into passing true information concerning their production possibilietes are presented. The final part tries to find answers to the question if it is possible to reform economic system in diraction to economic efectivity of society, but with preserved framework of central planning. Powered by TCPDF (www.tcpdf.org)
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Can Bayesian econometric methods outperform traditional econometrics in inflation forecasting?
Stráský, Josef ; Baxa, Jaromír (advisor) ; Netuka, Martin (referee)
Forecasting of inflation has become crucial for both policy makers and private agents who try to understand and react to Central Bank decisions because many Central Banks implemented inflation targeting rules instead of control of monetary aggregates. Inflation forecasting is considered to be very complicated issue because univariate regression models and structural macroeconomic models are usually outperformed by naive random walk model. This work is intended for forecasting inflation in the Czech Republic by employing Bayesian econometric method (namely Bayesian vector autoregression - BVAR). Bayesian methods proved to be useful in inflation forecasting in developed countries (Fabio Canova: G-7 Inflation Forecasts: Random Walk, Phillips Curve or What Else?, 2007). Bayesian econometrics is one of the fast developing fields of econometrics for past two decades. In the centre of the approach is Bayesian probabilistic theory based on conditional probabilities. This probabilistic approach is, however, computationally demanding. Fast computer evolution enables wide applications of Bayesian models. Model estimations are based on combining information from some prior beliefs and from the data. Many different sorts of models have their Bayesian variants (e.g. OLS) but the emphasis in this work is on Bayesian...
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Regional Convergence in the European Union: Do the Business Services Make the Difference?
Pintera, Jan ; Baxa, Jaromír (advisor) ; Kopečná, Vědunka (referee)
Despite years of deepening economic integration among the states and regions of the European Union, empirical research remains inconclusive about speed of convergence across regions, if not its existence. This thesis provides novel evidence on convergence in the EU while focusing on development at regional level after the Great Recession. It uses recently developed log t convergence test by Phillips and Sul (2007). Our findings speak against the convergence in level of income per capita among the European regions and give us five clubs of regions converging in their income growth rates instead. Investigating further the geographical distribution of the convergence clubs, we confirm high inequality within the member states and find large continuous area of high convergence clubs in the urbanized part of Western Europe. Furthermore, we investigated the determinants of convergence club membership using Logistic Regression. The main explanatory variable of interest were Business Services (BS), a dynamic sector of the economy with presumably strong positive effect on regional innovative potential. We found positive effect of BS on membership in higher convergence clubs. Yet, this effect seems to diminish for the very highest club.
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What Drives the Sovereign Bond Spreads in Central and Eastern Europe?
Růžička, Josef ; Baxa, Jaromír (advisor) ; Paulus, Michal (referee)
This thesis is devoted to spreads of sovereign bonds in central and eastern Europe relative to German government bonds. In the first part, a widely used government bond spread model is presented. It turns out that its assumption may be relaxed. Next, we show how spreads, inflation and exchange rates interact. Subsequently, we investigate the relationship between spreads and other macroeconomic variables by econometric methods. The most important factors affecting bond spreads in the region are public debt, GDP growth, openness of the economy, current account balance, and inflation. Bond markets in CEE put more weight on total level of public debt than on budget deficits. The effects of these variables differed before and after the year 2008. Two subgroups of central and eastern European countries with similar spread determinants were identified: the first group is formed by Lithuania, Poland, Slovakia, and Slovenia, while to the second one belong Bulgaria, Hungary, Latvia, and Romania. Uncertainty on global financial markets increases bond spreads in CEE as well as in western Europe. Bond spread determinants of the two groups differ from those of western European countries.
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