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Czechia's Choice: Would Euro Make a Difference?
Trubelík, Ivan ; Baxa, Jaromír (advisor) ; Dědek, Oldřich (referee)
Euro adoption constitutes a major step in the economic integration within the European Union. The aim of this work is to quantify the effects it would have on the Czech Republic should it join the Euro Area at various dates in the recent past. Employing a Global VAR model to make unconditional and conditional counterfactuals of the 29 modeled economies, the probabilities of a higher real output and of lower prices are estimated. The results suggest that, from the viewpoint of the Czech Republic, entering the Eurozone during the financial crisis of 2009 would deteriorate both the recession as well as the deflation. On the other hand, the most favorable entry date was estimated to be the beginning of 2020 with very high probabilities of a larger real output after a few initial periods of a slower growth. The Euro adoption thus appears to be an economic decision with benefits materializing in the longer term rather than an opportunity for an immediate stimulus. JEL Classification C32, C53, C54, C55, E52, F45 Keywords Euro Adoption, Global VAR, Probabilistic Fore- casting Title Czechia's Choice: Would Euro Make a Differ- ence?
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The Wage Curve and Regional Salary Differentials in the Czech Republic
Trubelík, Ivan ; Mysíková, Martina (advisor) ; Chytilová, Julie (referee)
The phenomenon of the Wage curve, discovered by Blanchflower and Oswald, has shown a remarkable persistence in time and across different countries. It relates the regional unemployment rate negatively to the absolute level of wages. This work examines the presence of the wage curve in the Czech Republic by two different models using district level data. A panel model is constructed for 2008-2017 and a cross-sectional model with additional control variables is specified for 2011. The data on average wage in this work are related to specific employees with multiple sources of income. The wage curve is then found with a coefficient of -0.42 for the longitudinal analysis and -0.78 for isolated cross- section. However, after including fixed regional effects in the panel model, the wage-unemployment elasticity diminishes to zero. The other part of this work studies the convergence in the Czech Republic district wage levels. By means of σ and β convergence indicators, it is concluded that the wages converged in the period of 2008-2017, with a faster rate in years 2013-2017. JEL Classification J22, J31, J51, R15 Keywords Wage curve, Unemployment, Regional wage, Czech Republic, Labor economics, Wage conver- gence Title The Wage Curve and Regional Salary Differen- tials in the Czech Republic Author's e-mail...
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