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Empirical Essays on Unemployment, Inflation and Access to Human Capital
Franta, Michal ; Münich, Daniel (advisor) ; Blien, Uwe (referee) ; Galuščák, Kamil (referee)
This dissertation consists of three distinct topics within labor macroeconomics, applied microeconomics, and applied time-series econometrics. The first essay extends the standard methodology used in analyzing unemployment duration. The extension is applied on empirical data for the Czech Republic and France. Furthermore, unemployment dynamics are examined in terms of unemployment incidence and duration for the Czech Republic, 1992-2007. The second essay belongs to the field of the economics of education. It contributes to the discussion on the equal access to higher education. The theoretical (structural) model of an individual schooling decision is set up and the implied reduced form is estimated on a unique data set of all secondary school graduates in the Czech Republic in 1998. Finally, the third essay deals with the inflation dynamics. It draws on extensive research in the modeling of the inflation process in developed countries. Nevertheless, the focus is on developing countries where specific economic and consequently econometric issues have to be considered.
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Microeconomic Analysis for Evidence-Based Policy
Janský, Petr ; Bauer, Michal (advisor) ; Blundell, Richard (referee) ; Galuščák, Kamil (referee) ; Schneider, Ondřej (referee)
This dissertation thesis is focused on the microeconomic analysis of public policy in the Czech Republic. It consists of three parts, the first two parts deal with the analysis of tax policy; the third part of this thesis is focused on inflation differentials. The first chapter deals with the analysis of value added tax. The rates of value added tax (VAT) have recently changed in the Czech Republic, and I simulate the impact of these reforms. They are an example of changes in indirect taxes that change the prices of goods and services, to which households can respond by adjusting their expenditures. I first estimate the behavioural response of consumers to price changes in the Czech Republic by applying a consumer demand model of the quadratic almost ideal system (QUAIDS) on the basis of the Czech Statistical Office household expenditure and price data for the period from 2001 to 2011. I derive estimates of own- and cross-price and income elasticities for individual households. I then use these elasticities to estimate the impact of the changes in VAT rates that were proposed or implemented between 2011 and 2013, on households' quantity demanded and government revenues. One of the main findings is that the estimated increases in government revenues that take the consumer responses into account are...
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Wage dynamics and financial performance: evidence from Czech firms
Babecký, Jan ; Galuščák, Kamil ; Žigraiová, Diana
This paper examines how the financial performance of a firm affects its wage policy. For this purpose, we match data on Czech firms from the Wage Dynamics Network survey covering the period 2010–2013 with balance sheet data. Controlling for a number of firm-specific characteristics and the environment in which firms operate, we find that financial performance matters for wage setting: contractual wages are more likely to grow in firms with a higher ratio of cash flow to total assets and in firms that invest more. Conversely, firms that froze or cut contractual wages during the survey period had lower cash flow over total assets, but not necessarily a lower investment ratio. The flexible wage component exhibits a similar pattern, but is more sensitive to demand shocks and firms’ financial conditions.
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Monetary and Fiscal Policy in Emerging Open Economics
Algozhina, Aliya ; Slobodyan, Sergey (advisor) ; Galuščák, Kamil (referee) ; Lewis, Vivien (referee)
Title: "Monetary and Fiscal Policy in Small Open Economies" Abstract This dissertation studies monetary and fiscal policies jointly, with their respective policy rules in a small open economy. Policy interactions have attracted new research interest since the 2008 crisis due to a global increase in fiscal debt. The first chapter extends the standard New Keynesian model of a small open economy with the structural specifics relevant for emerging market countries: two instruments of monetary policy - interest rate and foreign exchange interventions, two instruments of fiscal policy - public consumption and public investment, two types of households - forward-looking and rule-of- thumb consumers, and foreign debt via collateral constraint. Imperfect capital mobility is assumed, as foreign borrowings are restricted and there is a positive steady state difference between the domestic and foreign interest rates, due to more impatient households in the domestic economy. Parameters are calibrated for Hungary and the model's simulation is compared between two cases: with and without a collateral constraint. The results show that fiscal and monetary policy shocks transmit to the economy differently from the standard Mundell-Fleming model. A positive public investment shock can cause exchange rate depreciation and...
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A CONCEPT AND METHODS OF ESTIMATION OF THE NAIRU AND THE BUSINESS CYCLE AT THE LABOR MARKET IN THE VISEGRAD COUNTRIES
Jašová, Emilie ; Kadeřábková, Božena (advisor) ; Čadil, Jan (referee) ; Galuščák, Kamil (referee)
This dissertation describes the relationship between inflation and unemployment with the concept of the natural rate of unemployment at which inflation remains unchanged. By comparing NAIRU, as defined in this manner, with the actual unemployment rate, we obtain the gap in unemployment. In connection with the analysed substitution between inflation and unemployment, there can be found a decrease in the importance of the PC in the 1970s, a very popular New Keynesian PC in the 1990s, and doubts over the robustness of the estimates. On the other hand, the concept of the PC and the NAIRU had previously been developed in accordance with the real data. There is a broad consensus on the impact of monetary policy on nominal variables (inflation) and real variables (unemployment). Methods are also being combined and continuously improved This dissertation is seeking to prove or disprove the hypothesis of the NAIRU concept's usability in estimating the economic cycle on the labor market. This hypothesis has helped in the acceptance of: the support for the concept and estimating PC and NAIRU in the literature; the application of measures to refine the estimate of the NAIRU and PC in the empirical analysis of the dissertation; the dissertation conclusion's compliance with the latest international research, with the local authors and with the own research. The contribution of the dissertation can be identified thusly: distribution methods depend upon the different time periods, their treatment and the best methods for the conditions of the countries in the Visegrad Group; the specification of an unstable environment and its impact upon the estimation of the NAIRU and the economic cycle; the calculation of the unemployment rate of the sectors, age categories and their use in estimating the NAIRU and cycle on the meso-level; to determine the effect of different pricing structure indicators in order to estimate the NAIRU and the economic cycle on the labor market and the topicality of their estimates.
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Microeconomic Analysis for Evidence-Based Policy
Janský, Petr ; Bauer, Michal (advisor) ; Blundell, Richard (referee) ; Galuščák, Kamil (referee) ; Schneider, Ondřej (referee)
This dissertation thesis is focused on the microeconomic analysis of public policy in the Czech Republic. It consists of three parts, the first two parts deal with the analysis of tax policy; the third part of this thesis is focused on inflation differentials. The first chapter deals with the analysis of value added tax. The rates of value added tax (VAT) have recently changed in the Czech Republic, and I simulate the impact of these reforms. They are an example of changes in indirect taxes that change the prices of goods and services, to which households can respond by adjusting their expenditures. I first estimate the behavioural response of consumers to price changes in the Czech Republic by applying a consumer demand model of the quadratic almost ideal system (QUAIDS) on the basis of the Czech Statistical Office household expenditure and price data for the period from 2001 to 2011. I derive estimates of own- and cross-price and income elasticities for individual households. I then use these elasticities to estimate the impact of the changes in VAT rates that were proposed or implemented between 2011 and 2013, on households' quantity demanded and government revenues. One of the main findings is that the estimated increases in government revenues that take the consumer responses into account are...
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Empirical Essays on Unemployment, Inflation and Access to Human Capital
Franta, Michal ; Münich, Daniel (advisor) ; Blien, Uwe (referee) ; Galuščák, Kamil (referee)
This dissertation consists of three distinct topics within labor macroeconomics, applied microeconomics, and applied time-series econometrics. The first essay extends the standard methodology used in analyzing unemployment duration. The extension is applied on empirical data for the Czech Republic and France. Furthermore, unemployment dynamics are examined in terms of unemployment incidence and duration for the Czech Republic, 1992-2007. The second essay belongs to the field of the economics of education. It contributes to the discussion on the equal access to higher education. The theoretical (structural) model of an individual schooling decision is set up and the implied reduced form is estimated on a unique data set of all secondary school graduates in the Czech Republic in 1998. Finally, the third essay deals with the inflation dynamics. It draws on extensive research in the modeling of the inflation process in developed countries. Nevertheless, the focus is on developing countries where specific economic and consequently econometric issues have to be considered.
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Margins of Trade: Czech Firms Before, During and After the Crisis
Galuščák,Kamil ; Sutóris, Ivan
We investigate the extensive and intensive margins of trade of Czech firms in periods before, during and after the crisis of 2008–2009. The intensive margin explains most of the aggregate export growth in 2006–2014, which corroborates previous findings for other countries. The contribution of the extensive margin is smaller, explaining on average 39% of the aggregate export growth in 2006–2007 and around 25% to 30% of that in the post-crisis period. The lower contribution of the extensive margin may signal a lower rate of convergence of the Czech economy. The results indicate that the crisis had a more severe impact on small exporting firms and that exports to countries outside the EU gained more prominence in the post-crisis years. Our results are similar to findings from previous studies on the impact of participation in global value chains on firms’ trade. Specifically, a more negative impact of the crisis was observed for exports with higher import intensity. Overall, our results point to the importance of using disaggregated data in the analysis of countries’ export performance.
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Labour Market Adjustment since the Global Financial Crisis: Evidence from a Survey of Czech Firms
Babecký, Jan ; Galuščák, Kamil ; Žigraiová, Diana
The paper reports how Czech firms reacted to changes in economic conditions in the aftermath of the global financial crisis of 2008–2009 until 2013 and identifies specific patterns of employment, wage and price adjustment by firms. The results are drawn from a survey of firms conducted within the third wave of the ESCB Wage Dynamics Network (WDN3). Overall, while changes in demand were both positive and negative over the period, aggregate wage growth remained low, although more firms experienced an increase in average productivity over labour costs than a decline. Labour cost reduction was achieved mainly by reduction of new hires and by individual layoffs. The main obstacles to hiring workers were uncertainty about economic conditions, high payroll taxes and a shortage of labour with the required skills. The frequency of wage changes was lower in 2010–2013 than before and was attributed by firms inter alia to stronger competition. Wage freezes and wage cuts were still in use, while wage growth was more likely to be observed in very small and large firms and firms with a foreign owner. The frequency of price changes in 2010–2013 compared to 2008–2009 remained unchanged for more than 80% of firms. More frequent price changes were due to stronger competition and volatility in demand, while exchange rate changes contributed to higher frequency of price changes on foreign markets.
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