Template-Type: ReDIF-Article 1.0 Author-Name: Martina Horníková Author-Name: Jaromír Hurník Author-Name: Viktor Kotlán Title: Spontaneous Euroization in the Czech Republic (is it a problem and why not?) Abstract: The paper offers a preliminary analysis of possible spontaneous euroization in the Czech economy. After a brief general introduction of the issue of currency substitution it specifically discusses two things. First, the transmission channels of potential spontaneous euroization, through which the process could possibly complicate the implementation of domestic monetary policy. Second, it analyses the degree of euroization. Among the transmission channels, attention is paid to interest rate and exchange rate channels. The circumstances under which the transmission would be sub-optimal are discussed. Besides the impact on the monetary policy transmission, another risk of progressive spontaneous euroization is seen in the shift of the exchange rate risk from bigger to smaller enterprises in the economy. The available data do not allow a precise measurement of the degree of euroization. Nevertheless, both the ratio of euro-denominated over koruna-denominated deposits and the CNB's survey in 2003 suggest that euroization is not an obstacle for the Czech monetary policy at the moment. Keywords: monetary policy, euroization, dollarization, transmission mechanism, currency, currency substitution Classification-JEL: E42, E52, F15, F42 Pages: 99-108 Volume: 2005 Issue: 2 Year: 2005 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=255.pdf File-URL: http://www.vse.cz/pep/255 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:2:id:255:p:99-108 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/255 Template-Type: ReDIF-Article 1.0 Author-Name: Yu Hsing Title: Effects of Macroeconomic Policies and Stock Market Performance on the Estonian Economy Abstract: Based on a general equilibrium model, this study finds that real output in Estonia is positively associated with real quantity of money and negatively influenced by real depreciation of the kroon, real stock prices, and the expected inflation rate. Government deficit spending is found to be insignificant. Policy implications are that fiscal discipline pursued by the Estonian government is appropriate, that a stronger currency may better serve Estonia, and that the wealth effect of an increase in the stock price on real money balances is greater than the substitution effect. Keywords: deficit spending, real depreciation, stock prices, wealth effect, substitution effect Classification-JEL: E5, E6, O52, P24 Pages: 109-116 Volume: 2005 Issue: 2 Year: 2005 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=256.pdf File-URL: http://www.vse.cz/pep/256 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:2:id:256:p:109-116 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/256 Template-Type: ReDIF-Article 1.0 Author-Name: Josef Arlt Author-Name: Miroslav Plašil Title: Empirical Testing of New Keynesian Phillips Curve in Conditions of the Czech Republic in 1994 - 2003 Abstract: New concepts have been presented in modelling of inflation dynamics recently, among others the new Keynesian Phillips curve (NKPC). There are several traditional ways of NKPC model validity testing, but none of them seems to be practically applicable in conditions of the Czech Republic. We tried to test the validity of NKPC on the basis of time series. For this purpose we applied an interesting non-traditional method proposed by Demery and Duck. This method does not rely on direct estimation of NKPC parameters, but relatively easy tests based on the cointegration analysis of time series are employed. Its application indicates that the NKPC model cannot be considered as effective in conditions of the Czech Republic; this model does not describe the inflation process sufficiently and it is not a suitable model for inflation prediction or for the choice of appropriate monetary (anti-inflation) policy. Keywords: inflation, time series, cointegration analysis, model, new Keynesian Phillips curve Classification-JEL: C22, E12, E31 Pages: 117-129 Volume: 2005 Issue: 2 Year: 2005 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=257.pdf File-URL: http://www.vse.cz/pep/257 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:2:id:257:p:117-129 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/257 Template-Type: ReDIF-Article 1.0 Author-Name: Václav Urbánek Author-Name: Kateřina Maršíková-Nepolská Title: Financial Market in the Czech Republic and Human Capital Investment: Private Financing of Higher Education Abstract: In this paper we investigate the possibilities of investing in human capital at the financial market of the Czech Republic. In particular, the conditions for this investment would be different among individuals due to the difference of bequest amount and the credit market condition in financing the money for human capital investment or education. There is also higher risk for possible investors in determining individuals' income and in adverse selection. Our paper deals with the possibilities of avoiding these problems and we use our data from the survey of Czech universities students' earnings expectations collected during the years 2002 - 2004. We use expected returns to education of the Czech higher education students as a benchmark for creating student loans and human capital contracts models. Financial market and institutions should offer different ways of financial assistance. However, financial market of the Czech Republic is not prepared for this type of investment. Keywords: higher education, private universities, returns to investment, human capital contracts, tuition fee Classification-JEL: I22, J24, J41 Pages: 131-146 Volume: 2005 Issue: 2 Year: 2005 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=258.pdf File-URL: http://www.vse.cz/pep/258 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:2:id:258:p:131-146 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/258 Template-Type: ReDIF-Article 1.0 Author-Name: Libor Dušek Author-Name: Andreas Ortman Author-Name: Lubomír Lízal Title: Understanding Corruption and Corruptibility Through Experiments Abstract: Corruption and corruptibility - due to their illegal and therefore secretive nature - are difficult to be assessed either with traditional tools, such as hard data on criminal convictions or soft data elicited through opinion polls, questionnaires, or case studies. While there seems to be agreement nowadays that corruption does have a negative impact on (foreign) private investment and growth, government revenue and infrastructure, and social equality, and while there seems to be evidence that low economic development, federal structure and short histories of experience with democracy and free trade all favour corruption on the macro-level, it is poorly understood what exactly, on the micro-level, the determinants of corruptibility are and what institutional arrangements could be used to fight (the causes of) corruption. In this article we review a third, complementary mode of investigation of corruption and corruptibility: experiments. We assess their strengths and weaknesses, and identify areas where they could be particularly useful in guiding policy choices - namely in designing incentive-compatible and effective anti-corruption measures in public procurement. Keywords: corruption, corruptibility, experiments, experimental methodology Classification-JEL: C91, D62, D72, D73, K42 Pages: 147-162 Volume: 2005 Issue: 2 Year: 2005 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=259.pdf File-URL: http://www.vse.cz/pep/259 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:2:id:259:p:147-162 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/259 Template-Type: ReDIF-Article 1.0 Author-Name: Lukáš Vácha Author-Name: Miloslav S. Vošvrda Title: Dynamical Agents' Strategies and the Fractal Market Hypothesis Abstract: The efficient market hypothesis (EMH) fails as a valid model of financial markets. The fractal market hypothesis (FMH) is a more general alternative way to the EMH. The FMH is formed on the following parameter space: agents' investment horizons. A financial market is more stable when a fractal character in the structures of agent's investment horizons is adopted. For computer simulations, the classical model is modified. This adjusted model shows that various frequency distributions on agents' investment horizons lead to different returns behaviour. The FMH focuses on matching of demand and supply of agents' investment horizons in the financial market. The FMH asserts that investors have different information based on temporal attributes. Since all investors in the market have different time investment horizons, the market remains stable. Our simulations of probability distributions of agents' investment horizons demonstrate that many investment horizons guarantee stability on the financial market. Keywords: efficient market hypothesis, fractal market hypothesis, agents' investment horizons, agents' trading strategies Classification-JEL: C61, D84, G14 Pages: 163-170 Volume: 2005 Issue: 2 Year: 2005 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=260.pdf File-URL: http://www.vse.cz/pep/260 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:2:id:260:p:163-170 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/260 Template-Type: ReDIF-Article 1.0 Author-Name: Mete Feridun Title: Impact of Monetary Policy on Economic Instability in Turkey (1983 - 2003) Abstract: This article aims at revealing the effectiveness of Turkish monetary policy in controlling inflation rate and the stability of exchange rate using the rational expectation framework that incorporates the fiscal role of exchange rate. Based on quarterly data covering the period between 1983: Q4 and 2003: Q4, the analysis affirms that the effort of the Turkish monetary policy at influencing the finance of government fiscal deficit through the determination of the inflation-tax rate, to some extent, affects both the rate of inflation and the real exchange rate, thereby causing volatility in their rates. Moderate evidence emerges that inflation affects volatility of its own rate as well as the rate of real exchange. Keywords: monetary policy, rational expectations approach, economic instability Classification-JEL: C43, C81, I32 Pages: 171-179 Volume: 2005 Issue: 2 Year: 2005 File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=261.pdf File-URL: http://www.vse.cz/pep/261 File-Format: text/html Handle: RePEc:prg:jnlpep:v:2005:y:2005:i:2:id:261:p:171-179 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlpep/references/261