Prague Economic Papers, 2011 (vol. 20), issue 4

The Welfare State and Economic Growth

Vratislav Izák

Prague Economic Papers 2011, 20(4):291-308 | DOI: 10.18267/j.pep.401  

The paper examines whether redistribution policy is bad or good for economic growth by analysing government expenditure on the welfare state in the old and new post-socialist EU countries from the mid-1990 to 2008. Due to the differences among countries fixed effect is included in the model using panel data. We find negative association between the mean values of expenditure on the welfare state in several time periods and the subsequent GDP growth rate for EU-25 and also for the subsets (EU-15 and EU-10) of the EU countries. When taking into account explicitly the government budget constraint and applying dynamics the same conclusion can be drawn...

Foreign Exchange Rate Regimes and Foreign Exchange Markets in Transitive Economies

Jaroslava Durčáková

Prague Economic Papers 2011, 20(4):309-328 | DOI: 10.18267/j.pep.402  

In this paper we discuss the issue of the choice of foreign exchange rate regimes in transitive economies, their effect on the relative changes and the volatility of the foreign exchange rate and the development of the national foreign exchange market. The results of our analysis indicate that the choice of the foreign exchange rate regime is not a passive factor regarding both average relative changes in exchange rates and volatility as measured by the standard deviation. They also show that increased volatility of spot rates and a growing interest rate differential lead to the growth of the share of outright forwards and swaps (e.g. transactions...

Generalized Coase Theorem

Jiří Hlaváček, Michal Hlaváček

Prague Economic Papers 2011, 20(4):329-347 | DOI: 10.18267/j.pep.403  

In this article two original microeconomic models of an externality market are described: (1) model of optimal financial compensation of a damage caused by a negative externality in the economy with agents maximizing probability of their survival (generalized Coase Theorem) and (2) generalized model of optimal financial favour for agents provided a positive externality. Results of the models are compared with the outcomes of the standard microeconomics of subjects maximizing their own profit.

Determinants of Firm Delisting on the Prague Stock Exchange

Zuzana Fungáčová, Jan Hanousek

Prague Economic Papers 2011, 20(4):348-365 | DOI: 10.18267/j.pep.404  

This research investigates the emergence of stock market in the Czech Republic. We use Czech mass privatization as an experiment that allows us to analyze under what conditions a viable stock market arises. On the Prague Stock Exchange (PSE), unlike its counterparts in Poland or Hungary, exceptionally large amounts of shares were delisted e.g. excluded from public trading soon after trading at this market began in 1993. We estimate the determinants of shares delisting analyzing the period 1993-2004. Using firm-level data on listed and delisted companies we show that it was possible to prevent massive delisting if certain pre-privatization and privatization...

Checking the Czechs: Consensus and Dissention Among Czech Economists

Dan Šťastný

Prague Economic Papers 2011, 20(4):366-380 | DOI: 10.18267/j.pep.405  

Traditional consensus surveys among economists seem to suffer from two shortcomings. First, they target the consensus issue in a way that tends to underestimate the agreement among economists, and second, they fail to offer information about how much economists' agreed - upon position matches the actual policy, which is what, ultimately, most economists care for most. In this paper, I introduce a redesigned survey that attempts to remedy both shortcomings at once by asking about preferred direction of policy changes in selected areas. Based on data from such survey undertaken among economists in the Czech Republic, I specifically ask about 1) the degree...

How to Handle Uncertainty

Milan Mareš

Prague Economic Papers 2011, 20(4):381-382 | DOI: 10.18267/j.pep.406