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Ekonomická sladěnost České republiky s eurozónou ve světle finanční krize
Hájek, Jan ; Mertlík, Pavel (advisor) ; Cingl, Lubomír (referee)
This paper deals with the issue of synchronization of the Czech economy and the economy of the eurozone. The OCA theory which is key theoretical basis for the analysis contained in the paper is briefly described in the first part. In the second part cyclical and structural synchronization is evaluated by the means of correlation coefficients of the development of GDP, industrial production, inflation and interest rates. The obtained results show sufficient level of synchronization, impacts of the financial crisis also rather contributed to the current level of synchronization. Arguments for and against synchronization are discussed in the third part as well as mutual dependency of the both economies. Two quarters time lag of the Czech GDP growth rate behind the eurozone is discovered in the pre-crisis period. At the end OCA- index for the Czech Republic is recalculated, the value of the OCA-index for the Czech Republic is the lowest among tested countries.
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The Evolution of Optimum Currency Area Index: Post-crisis Perspective
Kadlecová, Pavlína ; Horváth, Roman (advisor) ; Geršl, Adam (referee)
This paper estimates the determinants of exchange rate variability for 21 developed economies in 1980-1998. The results show that traditional criteria implied by the optimum currency area (OCA) theory, such as business cycle synchronisation, trade linkages and economy size, determine to a large extent bilateral exchange rate variability. Using the ordinary least squares estimation, we compute OCA indices for European economies vis-à-vis Germany and identify countries showing consistently large or little signs of convergence. We find that since 1998, most European developed economies have converged to Germany whether or not they are using the euro, suggesting that structural similarity is not driven solely by monetary integration. Our results from the model estimated by the generalized method of moments suggest that two additional criteria reflecting labour market flexibility and private credit growth are significant in explaining the exchange rate variability and lead to a ranking of countries different from the traditional approach. We find a positive relationship between the OCA indices and GDP decline during the economic crisis of 2008-09, which further supports the view that the OCA index is a useful indicator of the candidates' readiness to join the Euro Area. We apply the results to the...
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Economic and legal aspects of euro adoption in the Czech Republic
NOVOTNÝ, Adam
The Czech Republic has committed itself to adopt the euro with joining the European union in 2004. Until today there has not been any political interest of setting the specific date of euro adoption due to low public approval. Currently, there is an increase of positive public opinion about euro so it is the right time to start an objective discussion. The thesis is divided into three parts. The First part describes the history and evolution of the European monetary union, Maastricht convergence criteria and the theory of optimal currency area. The second part presents possible economic benefits and costs of joining the monetary union. The third and the main part examines the real effects of euro adoption on sample of selected countries with similar characteristics. The impact of euro on main economic indicators was analysed and there has been carried out a comparison between these countries. Also the role of euro in trade of selected countries has been highlighted. Last but not least, the possible impact of euro on country competitivness has been analysed in the context of optimum currency area theory. It is expected that joining the monetary union leads to a boost of bilateral trade which harmonizes the economic cycles of trade partners. The main purpose of this part is to prove the increase of competitiveness of exporters gained from monetary union measured by the raise of the bilateral trade interconnection. Finally these two criteria - gross domestic product alignment and bilateral trade interconnection have been used to describe the suitability of Czech Republic as a candidate country for the European monetary union.
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The Evolution of Optimum Currency Area Index: Post-crisis Perspective
Kadlecová, Pavlína ; Horváth, Roman (advisor) ; Geršl, Adam (referee)
This paper estimates the determinants of exchange rate variability for 21 developed economies in 1980-1998. The results show that traditional criteria implied by the optimum currency area (OCA) theory, such as business cycle synchronisation, trade linkages and economy size, determine to a large extent bilateral exchange rate variability. Using the ordinary least squares estimation, we compute OCA indices for European economies vis-à-vis Germany and identify countries showing consistently large or little signs of convergence. We find that since 1998, most European developed economies have converged to Germany whether or not they are using the euro, suggesting that structural similarity is not driven solely by monetary integration. Our results from the model estimated by the generalized method of moments suggest that two additional criteria reflecting labour market flexibility and private credit growth are significant in explaining the exchange rate variability and lead to a ranking of countries different from the traditional approach. We find a positive relationship between the OCA indices and GDP decline during the economic crisis of 2008-09, which further supports the view that the OCA index is a useful indicator of the candidates' readiness to join the Euro Area. We apply the results to the...
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Currency separation of Czechoslovakia in 1993 - any lessons for the Euro area?
Husek, Daniel ; Holub, Tomáš (advisor) ; Břízová, Pavla (referee)
This thesis analyses important aspects of the Czechoslovak currency separation, its incentives, technical and organizational solutions and the total expense of the operation. The main contribution of this work is (i) comparing the situation in the Czech and Slovak Federative Republic before the currency separation in 1993 with the situation in Euro area countries after 2008 and describing its similarities, (ii) analytical view of a possible application of the solutions used within the separation of the Czechoslovak currency in the context of the Euro area states, and (iii) discussion about possible gains from leaving the European Monetary Union.
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The changing importance of OCA arguments in the national discussions about euro accession in the new EU member-states of Central and Eastern Europe in times of crisis
Slezák, Milan ; Dědek, Oldřich (advisor) ; Průša, Jan (referee)
The Eurozone has been the object of much controversy recently. Both on the member-state and on the EU level, policies are being made to cope with the many problems of the Eurozone. In this paper we state that academic economics is often unable to give the right advice for policymakers in the case of the Eurozone crisis, because this is a new situation where academics are disagreeing fundamentally about the best remedy for the problem. We come to this conclusion by first showing how one of the most prominent theories about monetary unions (the Optimum Currency Area theory) is unable to give any good advice to policymakers. After that we make a country-comparitive study between the ten new EU members in Central and Eastern Europe that joined in 2004 and 2007, which shows us that these countries respond fundamentally different on the Eurocrisis and that these reactions are more based on political and public support and national economic performance than on formal academic economics.
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Monetary Union of Belarus and Russia - Analysis of Possible Costs for the Belarusian Economy
Laurentsyeva, Nadzeya ; Holub, Tomáš (advisor) ; Dědek, Oldřich (referee)
Author: Nadzeya Laurentsyeva Title: Monetary Union of Belarus and Russia - Analysis of Possible Costs for the Belarusian Economy Abstract The thesis analyses alignment of the Belarusian and Russian economies with the aim to infer on costs of the possible monetary union for Belarus. Having estimated a structural vector autoregression model with long-run restrictions, we conclude that the economies have shared common supply and external demand shocks, but other temporary fluctuations have been, in large, asymmetric. Structural discrepancies (as proven by the qualitative analysis) and differences in the monetary policy foci and transmission (as illustrated by the estimation results of Taylor rules and a monetary vector autoregression model) could account for increasing misalignment since 2010. In terms of the welfare costs for Belarus (evaluated with a New Keynesian dynamic stochastic general equilibrium model), the monetary union can be considered preferable to the current monetary policy of the National bank of the Republic of Belarus, while being inferior to the hypothetical inflation targeting regime. The welfare gap between the two arrangements reduces, if stronger domestic price flexibility and higher synchronization of productivity shocks can be assumed.
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European currency after Greek crisis
Martinek, Petr ; Loužek, Marek (advisor) ; Vlček, Josef (referee)
This thesis describes the current state of the European Monetary Union. Special attention is paid to the development of the recent debt crisis which revealed many weaknesses of the EMU. This paper analyses these problems and suggests some solutions. It explains causes and consequences of the debt crises and concludes with prospects for the future development of the Monetary Union.
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Ekonomická sladěnost České republiky s eurozónou ve světle finanční krize
Hájek, Jan ; Mertlík, Pavel (advisor) ; Cingl, Lubomír (referee)
This paper deals with the issue of synchronization of the Czech economy and the economy of the eurozone. The OCA theory which is key theoretical basis for the analysis contained in the paper is briefly described in the first part. In the second part cyclical and structural synchronization is evaluated by the means of correlation coefficients of the development of GDP, industrial production, inflation and interest rates. The obtained results show sufficient level of synchronization, impacts of the financial crisis also rather contributed to the current level of synchronization. Arguments for and against synchronization are discussed in the third part as well as mutual dependency of the both economies. Two quarters time lag of the Czech GDP growth rate behind the eurozone is discovered in the pre-crisis period. At the end OCA- index for the Czech Republic is recalculated, the value of the OCA-index for the Czech Republic is the lowest among tested countries.
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Analysis of the Economic and Monetary Union crisis based on the Eurozone example
Ševčíková, Michaela ; Rovná, Lenka (advisor) ; Debnárová, Ľubica (referee)
Global economic and financial crisis uncovered serious structural deficiencies of the EU economies - especially of the Eurozone members. High levels of debt have resulted in inability to honour it and state bankruptcies or necessary debt restructurings are a real possibility. This paper analyzes the current Eurozone crisis on the basis of theoretical and methodical foundations of the Optimal Currency Area literature and theory of economic integration. It evaluates the rationality of the Maastricht nominal convergence criteria and analyzes the role of real convergence criteria in like with the introduction of common currency and common monetary policy. It discusses the non-compliance with the Stability and Growth Pact which was supposed to ensure fiscal discipline also after a country's Euro accession. It also deals with the current developments in the monetary and fiscal crisis of the most affected Eurozone members (Greece, Ireland, Portugal) which have already had to ask for financial aid from the EU and the IMF. Tools and measures adopted in this light by the EU and other national and supra-national authorities are also discussed and their partial evaluation is presented. The final section offers possible alternatives of future development of the Eurozone.
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