Prague Economic Papers, 2009 (vol. 18), issue 2

Original contributions, Original article, Research article

The credit crisis: what lessons for Visegrad?

Colin Lawson, Emília Zimková

Prague Economic Papers 2009, 18(2):99-113 | DOI: 10.18267/j.pep.344  

The origins, growth and importance of the 2007-2009 American and European credit crisis are analysed. The causes lie in the speculative bubbles, the changed attitudes to domestic property, the growth of securitisation and derivatives trading, the changing roles of financial institutions, poor policy choices and inadequate regulation. The Visegrad states are being affected by declining export markets that have triggered domestic recessions, and growing credit problems. The recession is especially penalising economies they have followed risky policies. The course of the recession is currently impossible to predict. But it is possible for these states...

Primary balance, public debt and fiscal variables in postsocialist members of the european union

Vratislav Izák

Prague Economic Papers 2009, 18(2):114-130 | DOI: 10.18267/j.pep.345  

The primary balance has influenced the unit costs of debt servicing in 10 postsocialist members of the EU. The effects of the GDP growth and the inflation are equally robust and significant. The coefficients of lagged debt are at variance with the expectations from Bohn's 1998 paper, and one cannot speak until now about the corrective actions of fiscal authorities in these countries. Only Poland has had on average a higher real long-term interest rate than the growth rate. Other countries could stabilize their debt-GDP ratio by running a primary deficit. But comparing the level of investment with profits only in Slovenia one can speak about the dynamic...

The supply of foreign direct investment incentives: subsidy competition in an oligopolistic framework

Tomáš Havránek

Prague Economic Papers 2009, 18(2):131-155 | DOI: 10.18267/j.pep.346  

This paper examines the microeconomic motivation of governments to provide tax incentives for foreign direct investment. Author applies the classical models of oligopoly to subsidy competition, endogenousing investment incentives, but leaving tax rates exogenous. According to the conventional wisdom, subsidy competition leads to overprovision of incentives. This paper suggests that, in the oligopolistic framework, supranational coordination can either decrease or increase the supply of subsidies. Further, in the setting of subsidy regulation, the host country's corporate income tax rate has an ambiguous effect on the provision of incentives.

The hierarchical structure of the firm: a geometric perspective

Kam Ki Tang, Leopoldo Yanes

Prague Economic Papers 2009, 18(2):156-175 | DOI: 10.18267/j.pep.347  

This paper incorporates hierarchical structure into the neoclassical theory of the firm. Firms are hierarchical in two respects: the organization of workers in production and the wage structure. The firm's hierarchy is represented as a sector of a circle, where the radius represents the hierarchy's height, the width of the sector represents the breadth of the hierarchy at a given height, and the angle of the sector represents the span of control. A perfectly competitive firm chooses height and width, as well as capital, in order to maximize profit. We analyse the short-run and long-run impact of changes in scale economies, input substitutability, and...

Efficiency and productivity analysis in health services

Martin Dlouhý

Prague Economic Papers 2009, 18(2):176-184 | DOI: 10.18267/j.pep.348  

Efficiency and productivity analysis is widely used in health services research. In the paper, two major modelling approaches to efficiency and productivity analysis in health services are evaluated. The first group comprises non-parametric methods based on the theory of mathematical programming, such as data envelopment analysis. The second group originates from econometric analysis of production function. Although the application of quantitative economic analysis in health services is not without problems, the methods discussed are able to help us with identifying best and worst practices within the health systems.