Prague Economic Papers, 2015 (vol. 24), issue 2

Original contributions, Original article, Research article

What is the Real Effect of Schooling on Economic Growth?

Rudolf Kubík

Prague Economic Papers 2015, 24(2):125-135 | DOI: 10.18267/j.pep.504  

This paper examines the effect of schooling on economic growth. It tests the link between schooling and economic growth using the system GMM estimation for a panel of 86 countries in the years 1960-2005. Affirming the results of the previous literature the positive impact of schooling on growth has been confirmed. The paper presents two main findings. First, additional year of schooling contributes positively to per capita output growth. Secondly, high percentage share of population with no formal education results in economic growth slowdown.

Foreign Direct Investment and the Business Cycle: New Insights after the Great Recession

Carlos Rodríguez, Ricardo Bustillo

Prague Economic Papers 2015, 24(2):136-153 | DOI: 10.18267/j.pep.505  

In this paper we examine how business cycles in the home country affect outward flows of FDI (OFDI). We employ a panel data set of OFDI flows for a representative sample of countries from 1970 to 2011. The findings of the regression models that we have used are consistent with the hypothesis that OFDI flows behave pro-cyclically. This is the case for different country subsamples, for different business cycle specifications and for the inclusion of other control variables as well. Beyond this main conclusion, home country interest rate and exchange rates reveal a negative effect upon OFDI flows.

Homo Economicus and Homo Stramineus

Marek Hudík

Prague Economic Papers 2015, 24(2):154-172 | DOI: 10.18267/j.pep.506  

The model of Homo economicus has often been criticized as unrealistic. In particular, it has been found lacking for allegedly assuming that people are selish, an assumption which is contradicted by both introspection and empirical evidence. The aim of this paper is to show that never in the history of the economic discipline has selishness constituted the core of the Homo economicus model. In fact, the standard economic model of behaviour which has been used by economists for more than a hundred years is reticent about the motives of behaviour. Critics thus do not criticize Homo economicus but a straw man - Homo stramineus. Three possible reasons for...

Econometric Model of the Czech Life Insurance Market

Radek Hendrych, Tomáš Cipra

Prague Economic Papers 2015, 24(2):173-191 | DOI: 10.18267/j.pep.507  

The aim of the article is to introduce a complex econometric model of cash-lows for the Czech life insurance market. Namely, technical-actuarial links among insurance variables observed in annually published summary balance sheets of life insurers are described by means of an econometric system of linear simultaneous equations. The suggested model is statistically veri ed and thus it can provide useful economic interpretations. Further, adjusted residual bootstrapping is introduced in this context as a straightforward alternative which can solve possible problems with questionable asymptotic distribution properties of residuals. This technique can...

An Empirical Analysis of the Diffusion of Information across Stock Markets of Central and Eastern Europe

Ovidiu Stoica, Mark J. Perry, Seyed Mehdian

Prague Economic Papers 2015, 24(2):192-210 | DOI: 10.18267/j.pep.508  

In this paper, we examine the efficiency of the transmission of information across the stock markets of Bulgaria, the Czech Republic, Hungary, Poland, Romania, and Slovakia, as well as the relative importance and influence of advanced equity markets of Germany and France on the abovementioned markets. The analysis is carried out using maximum likelihood regressions, Generalized Autoregressive Conditional Heteroskedastic (GARCH) models, and vector autoregression (VAR) estimations. The empirical results suggest that the Central and Eastern European stock markets react to the arrival of price innovations from Germany and France, but national stock market...

Cross-National Variation in Income Inequality and its Determinants: An Application of Bayesian Model Averaging on a New Standardized Inequality Data Set

Jiří Hasman, Josef Novotný

Prague Economic Papers 2015, 24(2):211-224 | DOI: 10.18267/j.pep.509  

A new good quality standardized data set for cross-national comparisons of income inequality covering 147 countries has been constructed. The Bayesian model averaging and multiple imputation approach have been used to identify robust correlates from a larger pool of potential predictors of cross-national variation in inequality determined from previous literature. The results document signiicant macro-regional speciicity both regarding levels and predictors of inequality. While globalization associates with lower inequality in Western countries, it has opposite e ects in Latin America, Sub-Saharan Africa or post-communist countries. Age structure,...

The Sources of the Total Factor Productivity Growth in Lithuanian Family Farms: A Färe-Primont Index Approach

Tomas Baležentis

Prague Economic Papers 2015, 24(2):225-241 | DOI: 10.18267/j.pep.510  

The Lithuanian agricultural sector still features the processes of land reform, farm structure development, and modernisation. Accordingly, there is a need to utilise the benchmarking techniques in order to fathom the underlying trends and sources of efficiency and productivity. This paper therefore aims at analysing the productive efficiency and the total factor productivity in the Lithuanian family farms. The research is based on the Farm Accountancy Network Data covering the period of 2004-2009. The Färe-Primont Indices were employed to estimate and decompose the total factor productivity changes. Furthermore, the stochastic kernels were applied...