Contexts of development of the czech economy in the nineties

In the economic cycle of the Czech Republic in the nineties the number of years of economic recession or stagnation was higher than the duration of economic growth. Two recessions from the early and late years of the decennium indicated how complicated it is to search for an appropriate structure of macroeconomic policies, adequate frameworks of regulatory mechanism's and velocity of property structure establishment. Low customs protection, loose regulation of the entry of new economic agents on the market, high tax burden, high cost of loan capital exerted a high economic pressure on the corporate sector. On the other hand, the soft standards of bankruptcy mechanism, financial discipline and exercise of property rights were applied. It resulted in a slow process of the more profound restructuring of companies inhibiting the growth potential of Czech economy in the second half of the nineties.

Keywords: banking sector, economic policy, regulatory framework, monetary development, economic development, nonfinancial sphere