Prague Economic Papers, 2010 (vol. 19), issue 4

Original contributions, Original article, Research article

Exchange Rate Pass-Through To Domestic Prices: The Case of South Africa

Matthew Kofi Ocran

Prague Economic Papers 2010, 19(4):291-306 | DOI: 10.18267/j.pep.378  

This paper examines the exchange rate pass-through to import, producer and consumer prices in South Africa using monthly data covering the period 2000M1 to 2009M5. The study uses innovation accounting tools (impulse response and variance decomposition) within the framework of an unrestricted VAR to examine the degree of pass-through as well as the relative importance of a number of variables in explaining changes in domestic prices. The key findings suggest that after 1 per cent shock to nominal effective exchange rate, the level of CPI increases by 0.125 per cent, giving a pass-through elasticity of 13 per cent. However, the pass-through elasticity...

Measuring Bank Efficiency: A Meta-Regression Analysis

Zuzana Iršová, Tomáš Havránek

Prague Economic Papers 2010, 19(4):307-328 | DOI: 10.18267/j.pep.379  

This article presents a meta-regression analysis of 32 studies on frontier efficiency measurement in banking, focusing on the sensitivity of the reported estimates to the methodological design. Our findings suggest that study design is crucial for the resulting scores. The differences between the scores estimated using parametric and non-parametric approaches arise when the Fourierflexible functional form is used since this functional form yields lower scores. Generally, the higher the number of observations, the higher is the average estimated efficiency. The removal of scale effects using equity capital increases the profit efficiency but it is insignificant...

Contingent Valuation: Past, Present and Future

David Hoyos, Petr Mariel

Prague Economic Papers 2010, 19(4):329-343 | DOI: 10.18267/j.pep.380  

This paper summarizes the long history of the contingent valuation method, stressing the important dates and events that influenced its economic applications. It reviews the economic theory of contingent valuation, highlights the related survey design, alludes to the econometrics methodology involved and discusses the validity and reliability of this method. In summary, this paper presents the state of the art of a method that has been applied in the economic valuation of natural resources for many decades.

Tax Wedge on Labour and its Effect on Employment Growth in the European Union

Primož Dolenc, Suzana Laporšek

Prague Economic Papers 2010, 19(4):344-358 | DOI: 10.18267/j.pep.381  

The paper assesses the characteristics of tax wedge, employment and unemployment rate in the EU and by using linear regression analysis with panel-corrected standard errors on the sample of twenty-seven EU Member States over 1999-2008 period analyzes whether the tax wedge affects the employment growth. The empirical estimates have shown that, with regard to employment and unemployment rate, the EU Member States can be classified into two groups. The first group is characterized with high tax wedge, low employment and high unemployment rate, whereas the second group has the alternative characteristics. The negative tax wedge-employment relation was...

The Binding Credit Constraints and the Welfare Effects of Housing Price Appreciation

Ashot Tsharakyan, Martin Janíčko

Prague Economic Papers 2010, 19(4):359-382 | DOI: 10.18267/j.pep.382  

The paper deals with some relevant effects of appreciation of housing prices on social and aggregate welfare. As it has been found difficult to assess the current situation given the housing market being the most affected by the crisis, earlier data from 1995 to 2006 have been used. It generalizes previously available results by considering credit constraints together with endogeneity of housing prices. First, housing price appreciation implies improvement in aggregate welfare in a model with exogenous housing price and credit constraints. Then, housing price is endogenized by modelling the supply side of the housing market. In this model, housing...

Book reviews

Exact Tools for Analysis of Non-Exact Problems

Milan Mareš

Prague Economic Papers 2010, 19(4):383-384 | DOI: 10.18267/j.pep.383