Prague Economic Papers, 1999 (vol. 8), issue 1

Original contributions, Original article, Research article

Relations between the european union and the visegrad group of eastern europe: examining the barriers to integraton

Mária Havrilová

Prague Economic Papers 1999, 8(1) | DOI: 10.18267/j.pep.36

The European Community (EC), in particular, took upon itself the role of the key external player in the political and economic restructuring programs in Eastern Europe. It successfully used a combination of aid packages and advice-giving, to frame its political and economic relations with the countries of Central and Eastern Europe. For their part, the Eastern states, hoping for a quick path to a convertible currency and EU membership, fully embraced the free market philosophy by swallowing the bitter pill of shock therapy, mass privatization and deregulation. The Eastern Europeans have gradually come to a significant twofold realization. First, that...

Fiscal issues in post-communist economies: a pragmatic and aggressive fiscal rule

Bruno Sergio Sergi

Prague Economic Papers 1999, 8(1) | DOI: 10.18267/j.pep.37

This paper illustrates why a tough fiscal policy in East Europe may be rethought. Western economic policy theories may be fashionable but sometimes fail when applied to transition economies. It is advanced a new proposal for guiding fiscal policy where top priority is given to the ratio government debt/GDP and not to implement a tough deficit policy. Selected transition economies have low debt, then a more pragmatic economic strategy combined with a feasible and wise budget rule on fiscal policy may build up a scenario of economic recovery and sustainable membership in a perspective enlarged European Union.

Prague stock exchange: sectorial indices development in 1997

Jiří Trešl

Prague Economic Papers 1999, 8(1) | DOI: 10.18267/j.pep.38

Statistical analysis of sectorial and global indexes at Prague Stock Exchange in 1997 was performed. The relative variability of sectorial indexes ranged from 5 % (Mining) to 29 % (Agriculture). The normal distribution was appropriate roughly for one half of index returns. Daily (resp. weekly) correlation coefficients between different sectorial daily and weekly returns were statistically significant particularly between Finance and Banking, Investment Funds and Heavy Industry sectors with typical values from 0.2 to 0.5 (daily) and from 0.4 to 0.6 (weekly). Quasi-periodic time course of indexes enables the trend modelling through harmonic components...

Cointegration between stock market indices: the case of the slovak and czech stock price indices

Dawit Alemu Bemerew

Prague Economic Papers 1999, 8(1) | DOI: 10.18267/j.pep.39

This paper provides an empirical investigation of long-term relationship between the stock market indices of the Czech and Slovak Republic. The empirical work applies log of weekly average data on the Czech PX - 50 and the Slovak SAX from September 1995 to December 1997. Empirical investigation is conducted by means of unit root tests and the EngleGranger methodology of cointegration test. The result from the unit root tests shows that individual stock indices are nonstationary - I(1). The result from the cointegration test shows that there is no long-term relationship between the two indices, even though, the strong economic ties and policy coordination...

Estimating the fundamental equilibrium exchange rate for the czech economy

Kateřina Šmídková

Prague Economic Papers 1999, 8(1) | DOI: 10.18267/j.pep.40

When currency turbulences hit the CZK in May 1997, the research presented in this paper had been nearly finished. It tried to contribute to the discussion of sustainability of external development of the Czech economy by comparing signals given by a set of indicators to signals implied by the estimates of fundamental equilibrium exchange rate (FEER) for the CZK.Interestingly, the method of indicators did not give an unambiguous answer. Specifically, when applied to the Czech data, debt as well as solvency indicators did not imply a danger of external crisis. Financial indicators with a shorter-time horizon did send some warning signals. Indicators...

The development of small and medium-sized companies in the czech republic

Marie Bohatá, Jan Mládek

Prague Economic Papers 1999, 8(1) | DOI: 10.18267/j.pep.41

This article focuses on the development of small and medium-sized enterprises (SMEs) in the Czech Republic (Czechoslovakia) after the Velvet Revolution in 1989. It starts with the approach to SMEs at the early stages of economic transformation aiming at the reestablishment of a market economy and further deals with the systemic policy of the Czech government towards SMEs. In order to characterize the current business environment and performance of the sector, it offers results of empirical surveys as well as data published by the Czech Statistical Office. On the basis of analytical results there are formulated some policy recommendations.