Prague Economic Papers, 2004 (vol. 13), issue 1

Original contributions, Original article, Research article

Public Debt Service, Interest Rates and Fiscal Variables in Transition Countries

Vratislav Izák

Prague Economic Papers 2004, 13(1):3-15 | DOI: 10.18267/j.pep.227  

The prevailing view in the literature is that the cost of debt servicing depends on the variables that determine the debt dynamics: primary balance, outstanding debt, economic growth and inflation. Several papers devoted to advanced market economies show that a stronger primary balance is associated with a lower cost of debt servicing. The interest cost of servicing the public debt is key both to its sustainability and to the burden it places on the public finances and the economy. A panel of four transition economies: the Czech Republic, Hungary, Poland and Slovakia in the time period 1994 - 2002 has been analyzed. The question is if also in these...

Efficiency of the Secondary T-Bill Market

Zdeněk Dvorný

Prague Economic Papers 2004, 13(1):17-25 | DOI: 10.18267/j.pep.228  

The article analyzes efficiency of the Czech treasury T-bill market and the interbank deposit market over period 1993 to 1999. An efficient market-expectation hypothesis and alternative preferred habitat hypothesis were selected to compare both the markets and to determine the extent to which they are affected by macroeconomic fundamentals. The results reveal that the treasury T-bill market is more effective compared to the interbank deposit market. This founding has strong implication in the sence that only the treasury market over the given period is appropriate to be empirically investigated.

An Application of the Garch-t Model on Central European Stock Returns

Miloslav Vošvrda, Filip Žikeš

Prague Economic Papers 2004, 13(1):26-39 | DOI: 10.18267/j.pep.229  

The purpose of this paper is to investigate the time-series and distributional properties of Central European stock returns. We test the random walk hypothesis and then consider an alternative to random walk - the ARIMA model for stock prices. The behavior of volatility of returns over time is studied using the GARCH-t model which also allows us to learn more about the distribution properties of stock returns. We employ the BDS test to assess the ability of the estimated GARCH-t model to capture all nonlinearities in stock returns. Our empirical findings reveal that the Czech and Hungarian stock market indices are predictable from the time series of...

On the Non-Neutrality of Money: Evidence from the 1990s

Petr Duczynski

Prague Economic Papers 2004, 13(1):40-54 | DOI: 10.18267/j.pep.230  

The paper examines the cross-country relations between nominal money and real output between 1990 and 2000. Both high money growth rates and declines in money are connected with below-average output growth rates. The association between the monetary base and real output is weaker than between M1 (or M2) and real output. I observe no tendency of money changes to precede output changes.

Being Acquainted with the Employer in Slovenia: Yes-For Employment, No-For Promotion

Marko Ferjan, Tomaž Kern, Goran Vukovič

Prague Economic Papers 2004, 13(1):55-66 | DOI: 10.18267/j.pep.231  

The fundamental question which we deal with in this paper is: from which sources do organizations in Slovenia most frequently obtain new staff. We questioned 1,075 people who are employed. We discovered that more than 40 % of them became employed through personal contacts. This means that they know someone at the organization they are employed in. This type of employment procedure is not typical in the contemporary world. It was established that those who became employed because of personal contacts are not promoted any faster than those who became employed by normal application procedures. Therefore, the method of recruiting does not influence promotion.

Technology and Antitrust Policies in a Polluting Industry

Joel Sandonís, Petr Mariel

Prague Economic Papers 2004, 13(1):67-81 | DOI: 10.18267/j.pep.232  

We compare different combinations of technology and antitrust policies from a social welfare point of view in a non-tournament model of cost reducing R&D with spillovers, for the case of a homogeneous goods duopoly, where production produces pollution as a by-product, firms face an exogenous emissions tax and can also invest in abatement technologies. We show that for sufficiently polluting industries facing a loose environmental policy, cooperative R&D is not always welfare improving; a policy of subsidizing cooperative R&D is always welfare improving; allowing for mergers may be socially desirable; not regulating the industry at all may be welfare...