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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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Why the Czech Republic postponed adoption of the euro currency?
Vošková, Martina ; Karlas, Jan (advisor) ; Knutelská, Viera (referee)
The diploma thesis is devoted to explanation of Czech position towards European monetary integration. Even though Czechia is committed to adopt euro, the official term has not been set. The main purpose of a thesis is to answer why the Czech Republic postponed entrance into to eurozone indefinitely. The first chapter applies materialistic aspects of liberal intergovernmentalist theory into the Czech context by analysing economic interests on micro and macro level. Detailed cost-benefit analysis results in a slight favour of entrance. However, valid economic arguments on both sides and lack of interest group pressure allow government to adopt waiting strategy. Second analytical part incorporates constructivist theory, particularly defines Czech national identity and its effect on public opinion on eurozone. The thesis refuses exclusive character of the Czech identity and its ability to fully explain postponement of euro adoption. Thesis main contribution to international relation research is final chapter, which extends traditional integration theories by perspective of ideology. Ideological prism seems to present the most eloquent explanation of the Czech position, especially dominance of firstly the Eurosceptic ODS and then populist party ANO, as well as conservative stance of CNB. Despite the fact that...
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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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Maastricht convergence criteria and their fulfillment by the Czech Republic
Punčochářová, Hana ; Jiránková, Martina (advisor) ; Bartušková, Hana (referee)
Fulfillment of Maastricht criteria is essential in order to enter Eurozone which currently consists of 18 member states. The main objective of this thesis is to assess preparedness of the Czech Republic for adopting common European currency. The thesis is divided into three chapters. The first chapter describes development of monetary integration in Europe and nominal and real convergence criteria. In the second chapter, some thoughts about the possible impact of adopting euro by the Czech Republic are provided. The subject of last chapter is the analysis itself of fulfillment of Maastricht convergence criteria by the Czech Republic through the period from 2010 to 2016. In addition, this chapter describes economic alignment of the Czech Republic with the Eurozone and the acceptance of euro by the Czech Republic.
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Non-membership of Sweden in the European Monetary Union
Kaštánková, Markéta ; Jiránková, Martina (advisor) ; Sankot, Ondřej (referee)
The Bachelor's thesis "Non-membership of Sweden in the European Monetary Union and its economic reasons"deals with the Swedish accession to the euro area. The aim of the first chapter is to introduce the economic history of Sweden, focusing particularly on the period of forming the welfare state and present economic prosperity. The second chapter looks deeply into the economic reasons of Swedish absence in the EMU, including primarily the non-attendance in the ERM II and the interest in keeping the independent monetary policy and finally summarises and explains the influence of Swedish historical developement on the common currency adopting attitude. The fulfilment of the Maastricht criteria by Sweden in 2014 has been analysed in the separate subchapter.
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Challenges of debt crisis for EMU
Pudilová, Jitka ; Bič, Josef (advisor) ; Šaroch, Stanislav (referee)
The main objective of this thesis is to evaluate whether European monetary union will overcome the crisis and move towards deeper integration. The first chapter is to assess whether the EMU an optimal currency area. The second chapter aims to clarify the causes and context of the emergence of the debt crisis, the third chapter then describes the long-term measures to overcome the crisis and outlining possible scenarios for the future development of the European Monetary Union and Greece.
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The Eurozone Crisis from the Perspective of the Theory of Optimum Currency Areas
Sýkora, Filip ; Němcová, Ingeborg (advisor) ; Žamberský, Pavel (referee)
The goal of this diploma thesis is to examine whether the theory of Optimum Currency Area (OCA) confirms the view that the economies of southern and northern member states of the European Economic and Monetary Union (EMU) display different economic characteristics. The thesis strives to answer whether a hypothetical separation of current EMU into two separate monetary blocks makes sense from the perspective of the theory of OCA. First, the thesis examines the evolution of the theory of OCA with a special focus on suggested criteria and their usefulness for the analysis of hypothetical break-up of EMU. These criteria are subsequently divided into economic and political criteria and into centrally fulfilled and separately fulfilled criteria. The thesis then examines how the member states of the EMU cope with the proposed criteria.
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Vliv eura na vývoj ekonomiky a zadlužení zemí jižního křídla Eurozóny
Plešingerová, Zuzana
This bachelor thesis discuss the influence of the euro on economic situation and debt crisis of four Eurozone's southern countries. Firstly, bachelor thesis analyse development of Portugal, Italy, Spain and Greece in the last 20 years prior to entering the eurozone. Afterwards, the development of four southern countries after adopting the euro is analysed using macroeconomic indicators in years 2001-2016 with focus on the influence of euro. Then thesis describes fulfilling of Maastricht criterias and observance of the Theory OCA's requirements, mainly the convergence of business. The last chapter concerns about development of Eurozone southern countries debt's with examination of the influence of euro on current debt crisis of southern states.
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