Prague Economic Papers, 2016 (vol. 25), issue 6

Equilibrium National Border and Its Stability

Nathan Berg, Jeong-Yoo Kim

Prague Economic Papers 2016, 25(6):637-654 | DOI: 10.18267/j.pep.582  

This article analyses a model in which the national border is determined non-dictatorially by being based on citizens' preferences. Each country faces a trade-off in terms of social welfare when considering whether to increase its size. As a country's size increases, the government can collect more taxes and provide more public goods, which, all else equal, makes its citizens better off. On the other hand, a country that increases its size is assumed to also increase the heterogeneity of its citizens' preferences leading to increased mismatch between preferences and the public goods provided by government. Notwithstanding the benefit of greater quantities...

Euro Dominance Hypothesis and Monetary Policy Independence the Czech Perspective

Łukasz Goczek, Dagmara Mycielska

Prague Economic Papers 2016, 25(6):655-670 | DOI: 10.18267/j.pep.584  

In this article, we investigate the actual level of monetary policy independence in the Czech Republic. We formulate the research agenda in terms of the Euro Dominance Hypothesis. The situation of the non-euro EU countries with derogation in terms of joining the EMU, like the Czech Republic, is similar to the pre-euro situation of the euro area countries, in which the problem of the stability of the European Mechanism System was predominant. We investigate the co-movement of interest rates between the Czech Republic and the Eurozone to assess the potential costs of monetary integration. Using cointegration and VECM methods we show that the ECB monetary...

Evaluating the Regulatory Burden: Pollutant Release and Transfer Reporting Costs

Eliška Vejchodská, Lenka Slavíková, Vítězslav Malý

Prague Economic Papers 2016, 25(6):671-685 | DOI: 10.18267/j.pep.583  

Environmental information disclosure instruments inevitably also carry information costs. It is important to pay attention to these costs because of the competitiveness issues connected with the regulatory burden of the private sector or the overall cost-effectiveness of different types of environmental regulation from the public sector point of view. We undertake an ex-post analysis to quantify and analyse reporting costs of private sector induced by the European Pollutant Release and Transfer Register (E-PRTR). We focus on the case of the Czech Republic. The average annual reporting costs, additional to other reporting duties, are €...

Dynamic Nexus between Exchange Rate and Stock Prices in the Major East European Economies

Dejan Živkov, Jovan Njegić, Vera Mirović

Prague Economic Papers 2016, 25(6):686-705 | DOI: 10.18267/j.pep.591  

This paper investigates the dynamic conditional correlation (DCC) between stock returns and exchange rate in four East European emerging markets. Due to persistent long memory and the presence of the asymmetric effect in all asset markets we applied DCC-FIAPARCH model. The estimated negative DCC parameters in all scrutinized countries confirmed that portfolio-balanced theory has predominance in the short run in all selected economies. DCC parameters revealed significant time-varying behaviour, especially during the major crisis periods. By embedding dummy variables in the variance equations, we came to the conclusion that global shocks affect the volatility...

The Distributional Impacts of Meal Vouchers in the Czech Republic

Petr Janský, Lenka Röhryová

Prague Economic Papers 2016, 25(6):706-722 | DOI: 10.18267/j.pep.587  

This article aims to analyse the distributional impacts of the meal voucher system in the Czech Republic, especially concerning income inequality. It analyses the redistributive effects of meal allowances on various income deciles providing rough estimates of the impact of meal allowance tax exemption on the government budget and simulating several scenarios for the replacement of the current meal allowance scheme with flat meal allowances. We estimate that meal allowance tax relief represents a direct burden of around 11.3 billion Czech korunas for the state budget, although this approximation does not take indirect effects into account and could...

EIC: A New Tool for Intellectual Capital Performance Measurement

Bojan Krstić, Ljiljana Bonić

Prague Economic Papers 2016, 25(6):723-741 | DOI: 10.18267/j.pep.586  

The purpose of this paper is to emphasize the importance of intellectual capital (IC) undisclosed on the assets side on the balance sheet of knowledge enterprises. This capital is very relevant, and mana-gers need to have information about it in order to facilitate effective IC management process. The issue of IC performance measurement has been a matter of growing importance in both academic community and managerial practices for the past two decades. Based on the previous ideas put forward in the literature of knowledge management and IC management, this paper suggests a new methodological framework for overcoming the problem of IC performance measurement...

Current Account, Consumption and Capital Mobility: An Econometric Approach

Václava Pánková

Prague Economic Papers 2016, 25(6):742-753 | DOI: 10.18267/j.pep.585  

This paper is an application of the consumption-smoothing current account theory the main principles of which appeared in the 1980s and gradually broadened to describe the intertemporal dynamics of important economic processes. In open economies, the consumption-smoothing current account process is related to the consumption behaviour of households. The effect on consumption choices and the current account is derived from the premise that households adjust their consumption expenditures according to the terms of trade. The process can be treated in an optimizing framework and originally was strictly connected to the permanent income hypothesis (PIH)...

A Few Critical Comments to the Paper by Marek Loužek: The Economic Approach to Science

Jan Ámos Víšek

Prague Economic Papers 2016, 25(6):754-770 | DOI: 10.18267/j.pep.610