Prague Economic Papers, 2003 (vol. 12), issue 4

Original contributions, Original article, Research article

Estimates of fundamental real exchange rates for the five eu pre-accession countries

Kateřina ©mídková, Ray Barrell, Dawn Holland

Prague Economic Papers 2003, 12(4):291-315 | DOI: 10.18267/j.pep.223  

Are there indications of real exchange rate misalignment in the case of the five pre-accession countries? Will stable real exchange rates, required by two of the Maastricht criteria, be in line with economic fundamentals in the pre-EMU period? In order to address these questions, we employ the concept of the fundamental real exchange rate (FRER). The FRER model approximates the integration gain with the impact of foreign direct investment on trade and allows for larger current account deficits if external debt is below a safety limit. According to the FRERs, there were signs of overvaluation for all the pre-accession economies, with the exception of...

Strategic market research and industry structure in integrated economy

Jacek Cukrowski, Manfred M. Fischer

Prague Economic Papers 2003, 12(4):317-329 | DOI: 10.18267/j.pep.224  

The paper is concerned with the impact of market research prior to integration with European Union (EU) on the structures of noncompetitive industries in integrated economy. The analysis focuses on monopolistic markets with stochastic demand. Firms are considered in dynamic multiperiod model, where intertemporal links are determined by expenditures on market research in a present period and benefits from this activity (i.e., smaller variance of the prediction error) in the future. We show that the optimal market research strategy is stationary and depends on market size. Consequently, after accession firms operating prior to integration in small markets...

Credit guarantees in a credit market with adverse selection

Karel Janda

Prague Economic Papers 2003, 12(4):331-349 | DOI: 10.18267/j.pep.225  

This paper deals with government interventions in agricultural credit markets in the Czech Republic. I first describe the institutional setting and the empirics of agricultural credit in the Czech Republic. I explain the activities of the Czech Agricultural Guarantee Fund and compare it with similar institutions dealing with the support of agricultural credit in transition and developed market economies. Then I introduce an adverse selection model of credit provision with proportional credit guarantees. The model distinguishes two market regimes - a developed post-transition market economy and a transition economy. This distinction between transition...

Testing convergence in life expectancies: count regression models on panel data

Stefano Mainardi

Prague Economic Papers 2003, 12(4):350-370 | DOI: 10.18267/j.pep.226  

Long-term growth convergence has extensively been investigated based on economic variables. Indicators of social development and health status are generally focused on their contribution to growth or on assessing national health care systems. Yet, as a general yardstick of well-being, life expectancy should be regarded as a criterion to measure crosscountry development patterns over long periods. Following a review of two approaches to estimating convergence, hypotheses and findings of recent studies on public health and growth are examined. Reformulating the analytical framework of both strands of research, discrete choice and parametric and semi-parametric...