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Comparison of the inflation prediction approaches: Monetary growth vs. Output gap analysis
Kuliková, Veronika ; Horváth, Roman (advisor) ; Hlaváček, Michal (referee)
Inflation is one of the often used monetary indicators in conducting monetary policy. Even though money supply is an essential determinant of inflation, it is not used in inflation modeling. Currently, output gap is considered as most predicative variable. This thesis brings the empirical evidence on the hypothesis of money supply carrying more information on estimating inflation than the output gap. It is provided on the case of 16 developed European economies using Bayesian Model Averaging (BMA). BMA is a comprehensive approach that deals with the model uncertainty and thus solves the variable selection problem. The results of analysis confirmed that money supply includes more information of inflation than the output gap and thus should be used in inflation modeling. These outcomes are robust towards prior selection and high correlation of some variables. Powered by TCPDF (www.tcpdf.org)
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Comparison of the inflation prediction approaches: Monetary growth vs. Output gap analysis
Kuliková, Veronika ; Horváth, Roman (advisor) ; Babin, Adrian (referee)
Inflation is one of the often used monetary indicators in conducting monetary policy. Even though money supply is an essential determinant of inflation, it is not used in inflation modeling. Currently, output gap is considered as most predicative variable. This thesis brings the empirical evidence on the hypothesis of money supply carrying more information on estimating inflation than the output gap. It is provided on the case of 16 developed European economies using Bayesian Model Averaging (BMA). BMA is a comprehensive approach that deals with the model uncertainty and thus solves the variable selection problem. The results of analysis confirmed that money supply includes more information of inflation than the output gap and thus should be used in inflation modeling. These outcomes are robust towards prior selection and high correlation of some variables.
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The Factors that Influence the Relationship between Money Supply and Inflation
Holoubek, Lukáš ; Jílek, Josef (advisor) ; Štekláč, Jiří (referee)
The aim of the thesis is to evaluate the factors that influence the relationship between money supply and inflation and to determine how these factors show over time. The work is based on the current knowledge of the quantity theory of money based on the synthesis of monetarist and new keynesianism approach. The main starting point of this thesis is the fact that there is a widening of the gap between money supply growth and inflation. In the thesis were observed the factors that influence the money supply, velocity of money and inflation. These factors are for exapmle political decisions, greater concentration of wealth in society, uncertainty in financial markets and the possible impact of the shadow economy and the increasing importance of sharing economy. The result of this thesis was the finding that in case of no significant change in the current system, the widening of the gap between the money supply growth and inflation will continue.
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Monetary developments in the Czech Republic in relation to interest rates
ŠKARDOVÁ, Nikola
The thesis is focused on monetary developments in the Czech Republic. Its main objective is to evaluate this development in relation to interest rates. The theoretical part deals with money market and monetary policy. The second practical part is focused on mapping of monetary developments or specific monetary aggregates, interest rate developments, the amount of credit money and subsequent analysis of the relationship of these variables over the last eleven years. For better clarity, the interest rates and amount of credit money classified according to the type of consumer and type of loan purpose. Statistical data are obtained from the statistical reports of the Czech National Bank
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The relationship of True Money Supply to the standard and alternative economic indicatators in the Czech republic
Lukáš, Matěj ; Svoboda, Miroslav (advisor) ; Šťastný, Daniel (referee)
The goal of this thesis is to test, whether the Austrian school monetary aggregate - True money supply (TMS) reaches a better mutual relationship with national income and inflation than the aggregate M2 used by the mainstream economics. The purpose of this test is the fact that according to the austrian economists TMS is supposed to be based on a coherent theoretical background, whereas M2 was created by using statistical methods. In order to reach a coherent comparison, monetary aggregates were tested not only with the standard aggregates -- GDP and CPI representing inflation, but also with the alternative aggregates coming from the theory of the Austrian school -- Gross Domestic Output and Composite Price Index. These aggregates were analyzed by the correlation, regressive and vector autoregressive analysis (VAR models). The results did not show a better relationship between TMS and the remaining macro-aggregates. However, the theoretical background of a indicator is crucial for the austrian economists, that is why this test does not prove any impropriety of the indicator but only it's worse practical utility.
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How True is the True Money Supply?
Vostal, Ondřej ; Svoboda, Miroslav (advisor) ; Hurník, Jaromír (referee)
The Austrian economists hold that the so called true money supply is theoreticaly superior to the classical M1, M2 and M3. Using the data from the Czech Republic I verify in my thesis whether it really could be the case. The true money supply is the sum of the amount of cash and goods (cash equivalents) which could be redeemed during a period not exceeding the horizon specified at a fixed rate known in advance in cash. In addition, most market participants have to think that the amount of cash available for the purpose of such exchange is unlimited. Several true money supplies, that differ in the horizons of the included cash equivalents, are constructed based on the Czech National Bank (ČNB) data spanning the years from 2002 to 2012. For the comparison of the true money supplies and the M an elementary model is used based on the equation of exchange. The main finding is that the indicators don't considerably differ. Thus it seems that the true money supplies and M are practically the same. For all the indicators, however, the estimates of the coefficient of the model are significantly different from the quantitative theory of money predictions. That's why the results are to be interpreted with caution.
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Deflation: the Austrian School Perspective
Řepík, Martin ; Havel, Jan (advisor) ; Chytil, Zdeněk (referee)
Deflation, today understood mainly as a decrease in price level, is in the eyes of the mainstream economists the threat and danger of the economic development. This view is based on the experience from the Economic Crisis between 1929 and 1933 and later development in Japan. Therefore, the price stability is nowadays comprehended as a non decline in price index; monetary policy actually states the sustainable increase as a goal. The Austrian School of Economics uses the original definition of the words inflation and deflation and defines them as the increase and decrease of money supply. Modern interpretation of these terms means for them a dangerous misunderstanding whose result is misapprehension of causal connections between individual phenomena. This leads not only to incorrect conclusions but, above all, to disruption of the economic system, price and production structure, and development of economic cycles caused by artificial increase in money supply, which brings profit to certain groups.
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Analysis of the Offer of Housing Credit
Peter, Karel ; Kolář, Pavel (advisor) ; Hašková, Simona (referee)
The goal of my thesis is to show the possibilities that financial markets offer nowadays in loans area. Interested person has many options to choose from, nevertheless even the basic orientation in these options is difficult. In my thesis I havenť focus only on theoretical princples of function. I have elaborated particular areas to the form of concrete offers, which reader, interested person in a loan, can nowadays get in czech environment. I'm presenting concrete products financial companies and compare them so, that reader can make clear image about quality single products and can indepedently decide, which product is form him the best. Im warning readers on difficulty connected with single solutions, their charges politics and risks.
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True Money Supply
Dufek, Michal ; Písař, Pavel (advisor) ; Czesaný, Slavoj (referee)
This thesis deals with the real money supply (True Money Supply). Monetary aggregates (M1, M2, M3) used in mainstream economics is that, in many respects inaccurate and therefore unsuitable. TMS monetary aggregates are preferable aggregates M1, M2, M3, because it counted some of the cash items twice, unlike M1, M2, M3, and therefore more accurately reflects the evolution in monetary economics. The aim of this work is based on established theory of money, count the real money supply (TMS1, TMS2) and investigate its characteristics and relationship with respect to selected economic indicators, which are: the monetary aggregate M2, the consumer price index (CPI), industrial producer price index (PPI), the discount rate, two-week repo rate, index of the Prague Stock Exchange (PX), the total volume of loans. Confrontation between TMS1 and TMS2 with selected economic indicators, can lead to a more accurate understanding of the causes of changes in the economy over the economic cycle. The theoretical part is to define the concept of money, creation, development, development of the banking system; commodity mode and paper (FIAT) money. The analytical part will try to uncover hidden phenomena and causal relationships between the real money supply and the development of the economy. The work is based on the methodology of the Austrian School of Economics, whose praxeologie seems to me the most because of its clarity and consistency. Without this theory, we could not understand the question: What else is money and what is not?
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Postwar German inflation and its emergence to hyperinflation in 1923
Šmídová, Barbora ; Soběhart, Radek (advisor) ; Fabianková, Klára (referee)
The bachelor thesis focuses on postwar inflation in Germany and on how the inflation moved up to hyperinflation. In the first part I would like to analyze the period to the year of 1914. How the central bank of German Empire functioned and in what condition had public finance occured before the war. The other parts deal with the course of war and postwar period in Weimar republic to the year of 1923. I tried to clarify, which sources were used by german government to finance the war and what role played here the central bank. I also consider, what influence had the total sum of reparation payments on deepening the inflation in Germany, which were set by Treaty of Versailles. In conclusion, I will summarize the stabilizing effect of german currency.
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