Prague Economic Papers, 2007 (vol. 16), issue 1
Original contributions, Original article, Research article
Monetary Policy and Asset Prices: What Role for Central Banks in New EU Member States?
Jan Frait, Luboš Komárek
Prague Economic Papers 2007, 16(1):3-23 | DOI: 10.18267/j.pep.294 
The paper deals with the relationship between monetary policy and asset prices. Besides surveying the general discussion, it attempts to extend it to recent developments in the New Member States of the EU (NMS), namely the Czech Republic, Hungary, Poland and Slovakia (the EU4). After a brief description of the current macroeconomic situation in the NMS, the appropriate reaction of monetary policy to asset price bubbles is analysed and the main pros and cons associated with this reaction are summarized. Afterwards, the risks of asset market bubbles in the EU4 countries are evaluated. Since the capital markets are still underdeveloped and the real estate...
Equilibrium Exchange Rates in the Eu New Members: Methodology, Estimation and Applicability to ERM II
Roman Horváth, Luboš Komárek
Prague Economic Papers 2007, 16(1):24-37 | DOI: 10.18267/j.pep.295
In this paper we discuss the estimation and methodology of the real equilibrium exchange rate partial equilibrium models and analyse to what extent the resulting estimates are applicable for setting the central parity prior to ERM II entry in the New EU Member States. Given the uncertainty surrounding the estimates, we argue that they are informative in the sign rather than the size of the misalignment of the exchange rate, but may still serve as useful consistency checks for the decision on the setting of the central parity. We argue that policy makers should consider the estimates in their decision-making only if the real exchange rate is substantially...
Wavelet Decomposition of the Financial Market
Lukáš Vácha, Miloslav Vošvrda
Prague Economic Papers 2007, 16(1):38-54 | DOI: 10.18267/j.pep.296
A heterogeneous agents model with the Worst Out Algorithm (WOA) was considered for obtaining more realistic market conditions. The WOA replaces periodically the trading strategies that have the lowest performance level of all strategies presented on the market by the new ones. New strategies that enter on the market have the same stochastic structure as an initial set of strategies. This paper shows, by wavelets applications, strata influences of the trading strategies with the WOA.
Pension Reform in the Czech Republic - A Contribution into the Debate
Marek Loužek
Prague Economic Papers 2007, 16(1):55-69 | DOI: 10.18267/j.pep.297
The paper is concerned with pension reform in the Czech Republic and abroad. It argues against two opinions: on the one hand, it is not necessary to do anything, and on the other hand, that a mandatory funded system should be implemented. Both approaches are false because of creating overwhelming explicit debts. The author recommends an evolutionary approach based on decreasing PAYG in combination with voluntary savings.
Can Motivation Theory Explain Migration Decisions?
Natálie Reichlová
Prague Economic Papers 2007, 16(1):70-85 | DOI: 10.18267/j.pep.298
According to Abraham Maslow's motivational theory, human action is motivated by five levels of human needs. The model introduced in this paper exploits Maslow's theory to explain migration flows between regions. In the model, movement from one region to another influences migrant utility in three ways: through change in wage owing to different regional wage levels, through changes in utility connected with a migrant's safety needs, and through disarrangement of a migrant's social network. When safety and social needs are added to the model, equilibria arise in which wage differentials between regions persist.