Prague Economic Papers, 2019 (vol. 28), issue 2

Original contributions, Original article, Research article

Exposure Modelling in Property Reinsurance

Jan Hrevuš, Luboš Marek

Prague Economic Papers 2019, 28(2):129-154 | DOI: 10.18267/j.pep.683  

Exposure curves play significant role in modelling of property per risk excess of loss non-proportional reinsurance contracts, especially in the situations when not enough historical data is available for applying experience-based methods or if the underlying exposure changed significantly. The paper deals only with the first loss scale (FLS) approach which is frequently used in Europe. An alternative approach is based on ISO´s PSOLD methodology which is typical for the U.S. The first research into FLS approach was done by Ruth E. Salzmann in 1963 and some further curves have been developed since that time, however, their...

Impact of Behavioural Attention on the Households Foreign Currency Savings as a Response to the External Macroeconomic Shocks

Vilma Deltuvaitė, Svatopluk Kapounek, Petr Koráb

Prague Economic Papers 2019, 28(2):155-177 | DOI: 10.18267/j.pep.690  

This paper investigates the impact of behavioural attention on the households' foreign currency savings as a response to the external macroeconomic shocks. The information that the households acquire via different communication channels is expected to influence their decisions regarding their savings' allocation into different currencies. This study has applied the fundamental macroeconomic models by including individuals' attention to the specific risks and search interest in specific keywords on Google in order to assess the impact of acquired information and its communication channel on the households' foreign currency savings. We employed...

Heterogeneous Impact of Quantitative Easing on Government Bond Yields

Mesut Turkay, Timur Han Gur

Prague Economic Papers 2019, 28(2):178-195 | DOI: 10.18267/j.pep.679  

Interest rates in many advanced countries have reached zero lower bound and this has led to the widespread use of unconventional monetary policies after the global crisis. Hence, it has been more and more important to better understand the effects of these policies on major economic variables and the transmission mechanism through which they influence the economy. This study analyses the impact of quantitative easing (QE) policies on local currency government bond yield in emerging market (EM) economies in a heterogeneous panel setting. An Augmented Mean Group (AMG) estimator is used that allows for cross-sectional dependence and heterogeneous slopes....

Structural Change, Exchange Rate and the Asymmetric Adjustment of Retail Energy Prices in Europe

Jonathan E. Ogbuabor, Anthony Orji, Richardson K. Edeme, Ezebuilo R. Ukwueze

Prague Economic Papers 2019, 28(2):196-234 | DOI: 10.18267/j.pep.693  

This paper examines the role of structural change in the asymmetric adjustment of retail energy prices following changes in crude oil costs. The paper also examines the pattern of adjustment in retail energy prices when exchange rate is accounted for as part of the marginal cost of importing crude oil in European countries with high oil import dependency ratio. The paper shows that the results of Greenwood-Nimmo and Shin (2013) no longer hold when the structural change in the relationship between retail energy prices and crude oil costs is taken into the consideration. The paper also cautions that studies like Kristoufek and Lunackova (2014) that failed...

Okun´s Law over the Business Cycle: Does it Change in the EU Countries after the Financial Crisis?

Marcel Novák, Ľubomír Darmo

Prague Economic Papers 2019, 28(2):235-254 | DOI: 10.18267/j.pep.694  

The relationship between economic growth and unemployment is well known. The growth of gross domestic product leads to a fall in unemployment and, reversely, its fall is associated with a rise in unemployment. The paper deals with the estimation of Okun's coefficient for EU28 countries between years 2001 and 2014. Additionally, two sub-periods are also analysed. These represent the pre-crisis period 2001-2007 and the post-crisis period 2008-2014. The result shows higher Okun's coefficient in the post-crisis period. Unemployment in that period responded to changes in gross domestic product more sensitively than in the pre-crisis period. As a result,...