Template-Type: ReDIF-Article 1.0
Author-Name: Nathan Berg
Author-Name: Jeong-Yoo Kim
Title: Equilibrium National Border and Its Stability
Abstract: This article analyses a model in which the national border is determined non-dictatorially by being based on citizens’ preferences. Each country faces a trade-off in terms of social welfare when considering whether to increase its size. As a country’s size increases, the government can collect more taxes and provide more public goods, which, all else equal, makes its citizens better off. On the other hand, a country that increases its size is assumed to also increase the heterogeneity of its citizens’ preferences leading to increased mismatch between preferences and the public goods provided by government. Notwithstanding the benefit of greater quantities of public goods afforded by living in a larger country, greater disatisfaction with the public goods provided by government (i.e. preference mismatch) makes some segments of the citizenry worse off. Contrary to Alesina and Spolaore (1997), we show that a symmetric national border may be unstable. We also examine whether voluntary declaration of nationality guarantees the social optimum. Despite economies of scale from unification, the model implies that, from a social welfare perspective, there may be either too few, or too many, countries. Unification leading to fewer countries can be social welfare enhancing if people’s preferences in those states are quite similar; secessions leading to a greater number of smaller states can be social welfare enhancing if preferences are sufficiently heterogenous.
Keywords: public goods, stability, national border, secession, unification
Classification-JEL: H7
Pages: 637-654
Volume: 2016
Issue: 6
Year: 2016
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=582.pdf
File-URL: http://www.vse.cz/pep/582
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Template-Type: ReDIF-Article 1.0
Author-Name: Eliška Vejchodská
Author-Name: Lenka Slavíková
Author-Name: Vítězslav Malý
Title: Evaluating the Regulatory Burden: Pollutant Release and Transfer Reporting Costs
Abstract: Environmental information disclosure instruments inevitably also carry information costs. It is important to pay attention to these costs because of the competitiveness issues connected with the regulatory burden of the private sector or the overall cost-effectiveness of different types of environmental regulation from the public sector point of view.  We undertake an ex-post analysis to quantify and analyse reporting costs of private sector induced by the European Pollutant Release and Transfer Register (E-PRTR). We focus on the case of the Czech Republic. The average annual reporting costs, additional to other reporting duties, are  € 365 per facility. The Czech PRTR comprises 8 times more facilities than required by the European law, and thereby increases correspondingly the total reporting costs. The best predictor variable of the costs is the need for measuring or calculating additional releases or transfers beyond the information requirements of other registers.
Keywords: reporting costs, information costs, PRTR, environmental information disclosure
Classification-JEL: L59, Q53, Q58
Pages: 671-685
Volume: 2016
Issue: 6
Year: 2016
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=583.pdf
File-URL: http://www.vse.cz/pep/583
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Handle: RePEc:prg:jnlpep:v:2016:y:2016:i:6:id:583:p:671-685
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Template-Type: ReDIF-Article 1.0
Author-Name: Łukasz Goczek
Author-Name: Dagmara Mycielska
Title: Euro Dominance Hypothesis and Monetary Policy Independence - the Czech Perspective
Abstract: In this article, we investigate the actual level of monetary policy independence in the Czech Republic. We formulate the research agenda in terms of the Euro Dominance Hypothesis. The situation of the non-euro EU countries with derogation in terms of joining the EMU, like the Czech Republic, is similar to the pre-euro situation of the euro area countries, in which the problem of the stability of the European Mechanism System was predominant. We investigate the co-movement of interest rates between the Czech Republic and the Eurozone to assess the potential costs of monetary integration. Using cointegration and VECM methods we show that the ECB monetary policy influences monetary policy in the Czech Republic and the actual level of monetary independence in the Czech Republic is much lower than it is presumed. Therefore, we argue that for the Czech Republic the cost of the joining the EMU will be lower than expected.
Keywords: monetary policy, interest rates, cointegration, VECM, the Czech Republic
Classification-JEL: C32, E43, E52, E58, F41, F42
Pages: 655-670
Volume: 2016
Issue: 6
Year: 2016
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=584.pdf
File-URL: http://www.vse.cz/pep/584
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Template-Type: ReDIF-Article 1.0
Author-Name: Václava Pánková
Title: Current Account, Consumption and Capital Mobility: An Econometric Approach
Abstract: This paper is an application of the consumption-smoothing current account theory the main principles of which appeared in the 1980s and gradually broadened to describe the intertemporal dynamics of important economic processes. In open economies, the consumption-smoothing current account process is related to the consumption behaviour of households. The effect on consumption choices and the current account is derived from the premise that households adjust their consumption expenditures according to the terms of trade. The process can be treated in an optimizing framework and originally was strictly connected to the permanent income hypothesis (PIH) and no restrictions to capital mobility. Both assumptions were successively relaxed and relationships allowing incorporation of the excess sensitivity hypothesis (ESH) and not perfect capital mobility have been introduced. Transformed into a VAR model with current account and national cash flow increments as endogenous variables, relevant conclusions are drawn on the basis of Granger causality, the equivalence of the current and predicted current account and an analysis of parameters of the model. Basic relationships and solutions are summarized and an application using the economies of the Czech Republic, Slovakia and Austria follows.
Keywords: current account, permanent income hypothesis, excess sensitivity hypothesis, capital mobility, VAR model
Classification-JEL: C30, E20, F21, F32
Pages: 742-753
Volume: 2016
Issue: 6
Year: 2016
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=585.pdf
File-URL: http://www.vse.cz/pep/585
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Handle: RePEc:prg:jnlpep:v:2016:y:2016:i:6:id:585:p:742-753
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Template-Type: ReDIF-Article 1.0
Author-Name: Bojan Krstić
Author-Name: Ljiljana Bonić
Title: EIC: A New Tool for Intellectual Capital Performance Measurement
Abstract: The purpose of this paper is to emphasize the importance of intellectual capital (IC) undisclosed on the assets side on the balance sheet of knowledge enterprises. This capital is very relevant, and mana-gers need to have information about it in order to facilitate effective IC management process. The issue of IC performance measurement has been a matter of growing importance in both academic community and managerial practices for the past two decades. Based on the previous ideas put forward in the literature of knowledge management and IC management, this paper suggests a new methodological framework for overcoming the problem of IC performance measurement in knowledge enterprises. Efficiency of Intellectual Capital (EIC) methodological framework offers practical solutions for measuring the efficiency of total enterprises’ IC, as well as the efficiency in the use of all IC components. The EIC framework connects financial accounting valuation and market valuation.
Keywords: efficiency, performance, measurement, intellectual capital
Classification-JEL: M21
Pages: 723-741
Volume: 2016
Issue: 6
Year: 2016
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=586.pdf
File-URL: http://www.vse.cz/pep/586
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Template-Type: ReDIF-Article 1.0
Author-Name: Petr Janský
Author-Name: Lenka Röhryová
Title: The Distributional Impacts of Meal Vouchers in the Czech Republic
Abstract: This article aims to analyse the distributional impacts of the meal voucher system in the Czech Republic, especially concerning income inequality. It analyses the redistributive effects of meal allowances on various income deciles providing rough estimates of the impact of meal allowance tax exemption on the government budget and simulating several scenarios for the replacement of the current meal allowance scheme with flat meal allowances. We estimate that meal allowance tax relief represents a direct burden of around 11.3 billion Czech korunas for the state budget, although this approximation does not take indirect effects into account and could thus be an overestimate. We provide evidence which suggests that the current form of meal allowances widens the income gap between beneficiaries and non-beneficiaries, within as well as across the income deciles. Affluent households receive meal allowances more frequently, and, moreover, the allowances they receive are both nominally and proportionately higher. According to our simulation using a constant budget of the size of our rough estimate replacing the current meal allowance scheme with a flat meal allowance system would promote income equality. Such a change would benefit the lower deciles, due to a higher share of individuals in these deciles being entitled to meal allowances, while the upper decile households would see a decline in their meal allowances.
Keywords: income inequality, meal allowances, redistributive effects, tax reliefs
Classification-JEL: D31, H23, H24, J32
Pages: 706-722
Volume: 2016
Issue: 6
Year: 2016
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=587.pdf
File-URL: http://www.vse.cz/pep/587
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Handle: RePEc:prg:jnlpep:v:2016:y:2016:i:6:id:587:p:706-722
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Template-Type: ReDIF-Article 1.0
Author-Name: Dejan Živkov
Author-Name: Jovan Njegić
Author-Name: Vera Mirović
Title: Dynamic Nexus between Exchange Rate and Stock Prices in the Major East European Economies
Abstract: This paper investigates the dynamic conditional correlation (DCC) between stock returns and exchange rate in four East European emerging markets. Due to persistent long memory and the presence of the asymmetric effect in all asset markets we applied DCC-FIAPARCH model. The estimated negative DCC parameters in all scrutinized countries confirmed that portfoliobalanced theory has predominance in the short run in all selected economies. DCC parameters revealed significant time-varying behaviour, especially during the major crisis periods. By embedding dummy variables in the variance equations, we came to the conclusion that global shocks affect the volatility of DCCs. Particularly, it happened during the Global Financial Crisis and European sovereign debt crisis, but the effects were not linearly equal in all countries. Complementary rolling analysis unveils how conditional volatilities of analysed assets influence DCC. The results suggested that exchange rate conditional volatility has higher influence on DCC than stock conditional volatility.
Keywords: exchange rate, East European countries, structural breaks, stocks, DCC-FIAPARCH
Classification-JEL: C51, C58, F31, G12
Pages: 686-705
Volume: 2016
Issue: 6
Year: 2016
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=591.pdf
File-URL: http://www.vse.cz/pep/591
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Handle: RePEc:prg:jnlpep:v:2016:y:2016:i:6:id:591:p:686-705
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Template-Type: ReDIF-Article 1.0
Author-Name: Jan Ámos Víšek
Title: A Few Critical Comments to the Paper by Marek Loužek: The Economic Approach to Science
Pages: 754-765
Volume: 2016
Issue: 6
Year: 2016
File-URL: http://www.vse.cz/pep/download.php?jnl=pep&pdf=610.pdf
File-URL: http://www.vse.cz/pep/610
File-Format: text/html
Handle: RePEc:prg:jnlpep:v:2016:y:2016:i:6:id:610:p:754-765
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