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The concept of "Schuldenbremse" as an instrument against indebtedness in the Federal Republic of Germany
Říhová, Dominika ; Mlsna, Petr (advisor) ; Kunštát, Miroslav (referee)
As a result of the rapidly rising debt in recent years, the Federal Republic of Germany has decided to stop this unfavourable trend. The approval and acceptance of the so-called debt brake (Schuldenbremse) into the Basic Law in 2009 was also supported by the fact that the amount of public debt significantly exceeded the defined limit by the convergence criteria. With the financial crisis and the associated debt crisis within the eurozone, it turned out that the rules set out in the Stability and Growth Pact are being handled by a few states, and therefore some states have, due to their irresponsible fiscal policy, faced serious problems which are characterized by the inability to repay their obligations. Consequently, austerity measures had to be taken and at the same time, other EU countries have been invited to adjust their public finances to contribute to the consolidation of Economic and Monetary Union. As a result, debt brakes or other measures were then embedded in national legislation to prevent further crises. The German debt brake is a set of seven constitutional laws, where the main assumption is the annual setting of balanced budgets, or balanced income and expenditure, both at federal and state level, in order to prevent new further indebtedness. It was stipulated that the state budget...
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CEE fiscal deficits in the course of financial crisis
Mareš, Jan ; Schneider, Ondřej (advisor) ; Jeřábek, Jakub (referee)
The thesis covers the fiscal adjustments of countries in Central and Eastern Europe (CEE) since the financial crisis of 2008/2009. The topic revolves around ongoing debate about the right steps to stabilize government finances and encourage economic activity. It provides an overview of the measures undertaken by the governments of the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Slovenia and Slovakia. The discussion of fiscal rules and institutions in CEE is also presented along with their influence on budgetary discipline. We follow with the review of literature debating government expenditures and government revenues having impact on economic growth. These relationships are then explored for countries of the CEE region based on the data from 1999 onwards. We apply Granger causality tests on reduced-form vector autoregressions and since we find no significant relationships between the government revenues, expenditures and GDP, we continue with structural vector autoregression using identification procedure developed by Blanchard and Perotti (2002). After identification, we utilize impulse response analysis to compute the multipliers of government expenditures and revenues. The multipliers generally take values close to zero and are found insignificant.
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How Common Currency Influences the Business Cycles in Central and East European Countries.
Wang, Yue ; Semerák, Vilém (advisor) ; Li, Yating (referee) ; Jeřábek, Petr (referee)
This paper investigates how the introduce of single currency influence on the synchronization of business cycles in Central Eastern European Countries. The Hodrick-Prescott filter is applied to extract the cyclical component of real GDP for fifteen European countries and the Vector Autoregression models are applied to further investigate the influence of fiscal policy on regional economies. A database of quarterly real GDP for business cycles and quarterly current account for fiscal variables for the period: 1995Q1-2019Q4 is constructed. The main results of the study can be summarized as follows. The establishment of Economy Monetary Union has significantly increased the level of co-movement across euro area member states. There is a high degree of synchronization of business cycles in core countries than periphery countries after the introduce of common currency. For CEEC-7 including non-Eurozone countries (Czech Republic, Hungary, Poland) and Eurozone countries (Estonia, Germany, Slovakia, Slovenia), clusters in correlation exist because their GDP reacts differently to the fiscal shocks especially after the global financial crisis and ongoing euro area crisis. Key words business cycle synchronization; Economic integration; Fiscal policy; VAR
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Fiscal and Budget council as actor in Public Policy
Pokorný, Jan ; Ochrana, František (advisor) ; Kotherová, Zuzana (referee)
The diploma thesis deals with the issue of fiscal and budget councils. The aim of the work is the analysis of the Czech Fiscal Council, which was established in 2018 and is a new element in the Czech system of fiscal and budgetary policy. Firstly, basic concepts such as public finance, fiscal and budgetary policy are defined. Subsequently, the sources of inefficiency are introduced, which affect the emergence of fiscal imbalances, and thus public debt. The basic idea for the establishment of fiscal and budget councils is the concept of Fiscal Governance, which can be divided into rules excepting to the councils. Numerical rules are currently a frequently used tool for assessing fiscal discipline. These rules are complemented by councils, which act as independent institutions. Due to the recent emergence, the practical part of the work analyses the Czech Fiscal Council regarding the foreign experience of independent fiscal and budget councils. Based on the results, it can be stated, that the Czech Fiscal Council does not deviate from the existing experience, on the contrary, it fits appropriately into this portfolio.
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Asset prices and macroeconomics: towards a unified macro-finance framework
Maršál, Aleš ; Horváth, Roman (advisor) ; Holub, Tomáš (referee) ; Kónya, István (referee) ; Pástor, Luboš (referee)
Asset prices and macroeconomics: towards a unified macro-finance framework Aleš Maršál March 30, 2020 Abstract The dissertation consists of three papers focused on fiscal policy and explaining what determines the dynamics of cross-sectional distribution of bond prices. The connecting factor of the thesis is however not just its main theme but also the used methodology. The valuation of bonds and effects of studied policies are endogenous outcome of the full-fledged macro-finance dynamic stochastic general equilibrium model. The first chapter provides broader context and non-technical summary of the three papers in following chapters. The first paper studies the role of trend inflation in bond pricing. Motivated by recent empirical findings that emphasize low-frequency movements in inflation as a key determinant of term structure, we introduce trend inflation into the workhorse macro-finance model. We show that this compromises the earlier model success and delivers implausible busi- ness cycle and bond price dynamics. We document that this result applies more generally to non-linearly solved models with Calvo pricing and trend inflation and is driven by the behavior of price dispersion, which is i) counterfactually high and ii) highly inaccurately approximated. We highlight the channels be- hind the undesired performance...
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Numerical fiscal rules and fiscal institutions in an economy with a dynamic common pool problem
Janásek, Lukáš ; Gregor, Martin (advisor) ; Hejlová, Hana (referee)
1 Abstract The focus of this bachelor's thesis is fiscal policy of a fragmented government that represents symmetric socio-economic groups. For the analysis of fiscal policy, I develop the model of a dynamic common pool. In the model, the fiscal choices of interest are 1) a level of tax revenue, 2) a level of public productive spending and 3) an intertemporal choice of a level of group's consumption spending. For each of the fiscal decisions, I describe a distortion associated with the fiscal choice stemming from the decentralized decision making. Next, I examine the impact of a deficit ceiling and fiscal institutions that centralize separate fiscal choices of groups on the three distortions. Due to the symmetry of groups, the analysis abstracts from the efficiency-equity trade-off. Among the key results is that three fiscal frameworks can attain the socially desirable fiscal policy: 1) centralization of the productive spending and the tax revenue combined with a deficit ceiling, 2) centralization of the consumption spending, 3) centralization of a budget size and the productive spending.
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The ECB, Austerity and the Fiscal Multiplier: A meta-regression analysis of Fiscal Multiplier Estimates in ECB Policy Recommendations
Brüsewitz, Caspar Gerbrandt ; Baxa, Jaromír (advisor) ; Havránek, Tomáš (referee)
The primary aim of this thesis is to examine whether the policy recommendations made by the European Central Bank in response to the financial crisis of 2008 were biased towards fiscal consolidation. It posits that such policies, commonly known as austerity, were underpinned by estimates of the fiscal multiplier that were lower than those of international and independent researchers. To analyse this, it provides a systematic overview of the ECB's fiscal multiplier estimates by performing a meta-regression analysis on all ECB working papers making multiplier estimates published between 1992 and 2012, and comparing the results against those of a larger dataset containing multiplier estimates made. It finds that the multiplier estimates of the ECB are significantly lower than the norm, which is potentially suggestive of bias. This thesis contributes to the literature on ideational bias in economic policy-making by providing a systematic literature review that helps inform the discussion on austerity in the EU. It also servers as a replication and expansion of previous meta-regression studies on the fiscal multiplier, by being the first study that specifically examines the estimates of a specific institution.
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The concept of "Schuldenbremse" as an instrument against indebtedness in the Federal Republic of Germany
Říhová, Dominika ; Mlsna, Petr (advisor) ; Kunštát, Miroslav (referee)
As a result of the rapidly rising debt in recent years, the Federal Republic of Germany has decided to stop this unfavourable trend. The approval and acceptance of the so-called debt brake (Schuldenbremse) into the Basic Law in 2009 was also supported by the fact that the amount of public debt significantly exceeded the defined limit by the convergence criteria. With the financial crisis and the associated debt crisis within the eurozone, it turned out that the rules set out in the Stability and Growth Pact are being handled by a few states, and therefore some states have, due to their irresponsible fiscal policy, faced serious problems which are characterized by the inability to repay their obligations. Consequently, austerity measures had to be taken and at the same time, other EU countries have been invited to adjust their public finances to contribute to the consolidation of Economic and Monetary Union. As a result, debt brakes or other measures were then embedded in national legislation to prevent further crises. The German debt brake is a set of seven constitutional laws, where the main assumption is the annual setting of balanced budgets, or balanced income and expenditure, both at federal and state level, in order to prevent new further indebtedness. It was stipulated that the state budget...
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Analysis of the Economic Crisis in Russian Federation during years 2014-2016
Šmilňák, Richard ; Vostrovská, Zdenka (advisor) ; Vebrová, Ludmila (referee)
The following thesis deals with the analysis of the crisis of Russian economy in 2014-2016. Depicting evolution of economic situation proceding this state of economy serves as a complementary aim to the main goal which is the analysis of state economic policy implementation in contrast with the countrys commodity dependence with the background of ongoing crisis. The focus of the thesis lays upon deconstructing chosen steps of monetary policy as well as modifications of the federal budget while importance of mining and export of oil and natural gas is being discussed. The outcome is a complex observation of the coexistence of monetary and fiscal policy during the process of reversing the path leading to a fiscal collapse.
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