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How well can a society and an economy face up to COVID-19 depends, among other factors, on how many jobs can be performed at home. Work from home has the potential to increase firms' productivity and quality of workers' lives regardless of COVID-19, but it can also create new challenges. In this paper, we estimate the share of Czech workers who could work from home, using detailed Czech labour force survey data and an internationally recognised occupational classification methodology. Overall, we apply in the Czech context a methodology developed by Dingel and Neiman and published by the Journal of Public Economics in 2020. Our results show that about one third of Czech workers can perform their jobs from home. This share is comparable with countries at similar per capita income levels and with the share of workers who worked from home in Czechia during COVID-19 in the spring of 2020. The ability to work from home is distributed unequally across sectors, regions and workers' education levels. Whereas around four fifths of workers in the financial or the information technology sectors can work from home, less than one in five workers in agriculture and culture can work from home. Most university-educated workers can work from home, but only one in ten workers with primary education can do so. About a half of the workers in Prague can work from home, while only about a quarter can do so in the rest of the Czech Republic.

It is a theoretical fact that countries in which foreign direct investments (FDI) are realized by trans-national corporations for the purpose of profit should have some economical and institutional pull factors. This study examines whether Chinese FDI in African countries is supported theoretically by the economic and institutional factors of these African countries or whether these investments instead serve mercantilist policies of China independently of these factors. With this in mind, we examined the effect of the GDP, trade openness, natural resource rents and some institutional indicators of the host African countries on the Chinese foreign direct investments within the period 2003-2017 for 10 African countries. We used Swamy's random coefficient panel regression method due to the heterogeneity of these 10 African countries. The empirical results show that China makes foreign direct investments in Africa for market and resource-seeking purposes which display significant elements of a "chopsticks" mercantilist policy.

The essence of fiscal decentralization is to increase economic efficiency in the redistribution of resources in the public sector through more effective satisfaction of local public needs by lower levels of government. The article aims to quantify the optimal degree of fiscal decentralization in relation to economic growth in a sample of 29 OECD countries for the years 1975-2018. Empirical research has shown a nonlinear relationship between the degree of fiscal decentralization and economic growth, which takes a parabolic shape. The optimal degree of fiscal decentralization maximizing economic growth reached the level of 31.3656%, or in the case of per capita growth, the level is 31.1309%. In most V4 countries, the degree of fiscal decentralization is at a lower level compared to the optimal one, which is not leading to maximization of economic growth, or economic growth per capita.

Pension systems are strained with negative impacts on the state budget as a consequence of the endangering trend of worsening demographic structure and population aging. The aim of this paper is to map trends of employment rates of persons 65-69 years old in the Czech Republic and Slovakia between 1998 and 2017 and to analyse selected determinants affecting these rates. These determinants are then subjected to statistical and regression analysis using panel data for the period 1998-2017. Based on the analysis results, the authors come to three conclusions for both countries: firstly, the increase in pensions is not a limiting factor in the employment of persons aged 65-69; secondly, the participation of persons with tertiary education is of great relevance, implying the need for support to tertiary education; thirdly, the results confirmed the significance of the health determinant of persons aged 65-69, ensuing the need for stimulating investment in health.

The aim of the presented research is to quantify the costs of unemployment in the Czech Republic in the years before start of the 2020 exogenous crisis. The costs of unemployment are quantified as direct costs and induced costs. The research method is based on the con- struction of the average unemployed. I identify his/her average income level, length of unemployment and age, as well as level of education. The analysis also quantifies the economic effectiveness of hypothetical economic policy measures in maintaining employment.

The paper analyses the relationship between economic growth and human development in developing countries. While the former is often perceived as a necessary precondition for successful human development, the latter is regarded to be the main development objective. However, the link between economic growth and human development seems to be more complex. According to Ranis et al. (2000) the relationship is two-sided and mutually reinforcing, so in the long run the countries usually end up either in the vicious circle of bad economic growth and human development performance, or in the virtuous circle of positive results in both areas. The authors also suggest that the emphasis on economic growth does not lead to desired human development outcomes. Our work builds on their research and improves the methodology: we have introduced two new classifications based on countries' outcomes in areas of human development and economic growth that allow us to obtain better and more precise results. We have investigated data for 71 developing countries in three periods of time within 1980-2012. Our main findings are in some respects in line with Ranis et al. (2000) and suggest that countries with high pace of human development appear to achieve and retain high economic growth in the future, thus heading towards the virtuous circle of fast economic growth and human development. On the other hand, countries with low pace of human development tend to fall into vicious circle of slow economic growth and human development.

The Impact of Indirect Taxes on Economic Growth The main purpose of this article is to investigate the impact of indirect taxes on economic growth in a long term. The dynamic and static panel regression analysis methods were used to explore the relationship between observed variables. The models are based on neoclassical growth model extended by human capital. The models are verified using data on chosen European countries from time period 1970 to 2011 and from time period 2000 to 2011. Taxes are included into models by indicators of tax burden. It was used TQ, ITR and WTI. The results of empirical analysis revealed that impact of taxes on economic growth is negative in a long term. The most negative impact on economic growth was proven in case of direct taxes. Economic growth is influenced positively by indirect taxes. The statistical significance of corporate tax and property taxes were not proven.

The problem of population ageing and related questions of sustainability of the pension system in the Czech Republic represent serious and discussed topics. Pension and health care systems are significantly influenced by the changes in the population structure. There is a disproportion between paid retirement pensions and received pension contributions in the pension system. The problem lies in the proportion of economically active and inactive population and the possibility of our economy to ensure sufficient resources in the future. Pensioners will consume real goods and services and have the unquestionable right for satisfaction of all their needs. For the economy, it is not important if these needs are satisfied through public or private funds or if there is a system based on contributions or benefits. Our paper offers an economic view of ageing population from the perspective of the estimate of pension liabilities. The paper also shows that the influence of the choice of the system is not important in terms of the economy. Of course, it is important for each of individuals. The problem is connected with equity, solidarity and efficiency of the management of funds. Regardless of the system, liabilities to people in the retirement are equal. Although these estimates are based on various assumptions that may vary over time, the total value of pension entitlements represents key information for policy makers. Thus the estimated proportion of pension liabilities to GDP reflects the amount of output that will be needed to satisfy the needs of current and future retirees.

The Influence of Fiscal Deficit Creation on Economic Growth The discussion of influence of fiscal consolidation on economic growth is quite interesting and important topic. Consequently, the main aim of the article is to determine differences within the influence of fiscal deficit on the economic growth, which is caused by changes in certain groups of government expenditures and revenues. We focus on two different economic growth indicators. The first is growth rate of real GDP and the second is growth rate of potential output. The panel regression method is used which data covers 13 old EU member states in 1996 to 2013. We employ the omitted fiscal variable approach. There is a hint that every defi cit to revenue substitution has no significant growth effect. The results of expenditures imply, that government should reduce deficit created by debt service. The measure has relatively stronger effect on supply side. Potential output growth can also be supported by the deficit decrease of social expenditures. Lowering government consumption is detrimental to GDP, but it is not to potential output. There are some differences between results of two types of growth. Hence government should decide, if consolidation effect is considered against GDP or potential output at first.

The aim of this paper is to find a long-term relationship between the economic growth and the size of government. Four different characteristics are used to measure the government size. Total public expenditures, total tax revenues, fi nal government consumption and share of compensation of public workers to overall spending. There are also added control variables and time dummy variable to prevent biased results. The analysis was performed on data from 30 OECD countries from years 1995-2014. Fixed-eff ects panel regression was used to determine relationship between these individual indicators of government size and the economic growth. Main findings of this paper are that change in all indicators is negatively correlated with the growth. Especially in case of final government consumption which indicated the strongest negative relationship.

Developments in the commercial property market are an important factor affecting financial stability, especially given their effect on the probability of default of non-financial corporations. This article analyses the development of the office property markets in five central European countries and compares their main indicators with those for Germany. It then formulates a simple error correction model of office property prices in relation to macroeconomic, demographic and structural determinants. The analysis reveals that both demand and supply factors (GDP, inflation and total office space), and partly also the maturity of the credit market, have an effect. Using this model, property prices are identified as having been overvalued in 2006-2008. However, in the CR office space currently appears to be slightly undervalued.

The aim of this paper is to quantify the implementation lag of discretionary fiscal policy in the Czech Republic between 1997 and 2013. Based on a unique dataset created for this study, the length and structure of implementation lag is analysed. Dataset is extending the original dataset used by the Czech National Bank. This study further analyses factors with an impact on implementation lag. Implementation lag is the length of period between decision of the economic policy makers on the actual response to the fundamental change in the economy and implementation of this response to the legislation. Average implementation lag of discretionary fiscal policy in the Czech Republic is 2.4 quarters. The greatest deal counts for the implementation lag in the Chamber of Deputies. Length of implementation lag of discretionary fiscal policy is influenced especially by the total occupancy of the Chamber of Deputies, majority, which the government parties have in the Parliament, and the frequency of the veto power usage.

The main target of the paper is to identify the influences of the financial and trade liberalization in the EU and the functioning of the EMU on the realization of the cross-border mergers and acquisitions among the selected states of the European territory. We analyse in the paper, concerning the theoretical background of the foreign scientific studies on the influence of the integration processes in Europe on the realization of the cross-border mergers and acquisitions, the influence of the selected predictors on the cross-border mergers and acquisitions realized in 16 source countries and 25 target countries in the European territory from 1998 to 2012 (database data created by the authors) through the generalized linear model. Empirical results of several foreign studies (e.g. Bjortvan, 2004, Neary, 2007, Brouwer, Paap, Viaene, 2008, Coeurdacier, De Santos, Aviat, 2009 etc.) indicate that European integration had a positive impact on the development of cross-border mergers and acquisitions especially in manufacturing sector. We came to the same conclusion based on our analyses, while the integration into the EU has a critical influence, which is significantly higher in manufacturing sector. The influence of the integration into the EMU can be regarded as additional and it is identical for manufacturing sector and service sector. We can claim definitely that the institutional changes, such as the unified market of the European Union and the European Monetary Union were releasing factors of capital reallocation all over the world. The European Monetary Union encouraged the capital reallocation through the effects of unilateral financial liberalization (a decrease of marginal and fixed costs for execution of reallocation transactions) and thus facilitated the implementation of cross-border mergers and acquisitions in the European area.

Consumer choice theory uses continuous utility function, representing the consumer preference relation, as a traditional matter of course. However, there are alternative ways of defining consumer's optimum and proving its existence even without introducing such function. Contrasting both approaches raises question about aspects and limitations of economic interpretation of the mathematical form used in the theory. This article investigates economic interpretation in microeconomics as a relation of mathematical model and economic concepts and, using the example of consumer choice theory, formulates a model of economic interpretation based on the properties of analogical thinking, as defined by contemporary psychological literature. Model provides a framework for identifying risks coupled with economic interpretation of mathematical objects, their properties and relations.

The fundamental premise for the regular performance of economic policy, fulfilment of the revenues of the state budget and thus creating optimal conditions for efficient fiscal policy realization, is to minimize state receivables after maturity, as the theoretical planning of the revenue side of the state budget is irrelevant considering that tax payers and other entities fail to fulfil their liabilities towards the state, more precisely state budget, and conversely the state is not able to provide the approved income in the state budget. The objective of this paper is to: analyse the development of state receivables in years 2001-2014; identify the causes of the state receivables origin; test econometrically the dependence of formation of the state receivables after maturity on the economic cycle, the tax rate change and entry of the Czech Republic to the European Union; evaluate the results of the long-term research of implementation of an experimental model, during which the possibility of reaching incomparably higher efficiency was verified and proven in the management process of state receivables recovery; highlight this important negative determinant of the state fiscal policy. With regard to aforesaid, this text is structured in the following way. First, the author took into consideration the theories which are connected with surveyed matters, following by the characteristic and causes of state receivables development for the period of 1991 to 2014. The economic testing of dependence comes after. Next chapter characterizes the development of two experimental models for management process of recovery of state receivables after maturity, research results included. The last chapter provides all the research results, evaluates the economic policy significance of this destructive factor of fiscal policy and suggests some solutions.

Relative changes in home and foreign assets of the Czech banking system are negatively correlated in the period 1996-2017. The target of the research is to test this empirical fact deeply to explain how far this is only a balance sheet effect that is a result of booking the exchange rate changes in monetary survey statistics and how far this is a consequence of economic system behaviour. Our empirical analysis using the Granger causality test and the unconditional ARDL ECM model does not rule out the validity of the balance sheet hypothesis. Besides, it explains the economic nature of this phenomenon in relationship with GDP, exchange rate, foreign reserves, short-term interest rates and bank capital dynamics and confirms a possibility of substitutions between net home and foreign assets of a banking system within a money creation process represented by the M2 monetary aggregate.

The paper investigates the extent and reasons for restatements of financial statements by Czech firms. In 2013, Czech accounting regulation was amended to remove inappropriate accounting treatment for prior period errors and changes in accounting policies. A sample of 3,407 financial statements for the period 2013-2017 also includes a significant amendment to accounting standards in 2016. The combination of both amendments creates a quasi-natural experiment enabling investigation into firms' response to regulatory changes. Empirical analysis shows that restatements occurred in 7.4% of the cases. Using non-parametric tests, we found that restatements are more frequent in joint-stock companies and that corrections of prior period errors dominate over changes in accounting policies. An expected one-time increase in restatements in 2016 is confirmed; however, the hypothesis that increased restatements are driven by changes in accounting policies required by new GAAP can be neither confirmed nor refuted. The main cause is that over 50% of the entities did not disclose their reason for restatement, despite the fact that disclosure is mandated by accounting standards and all financial statements are audited.

This paper builds a simple framework for analysing over- or undersaving of economies in the context of external economic imbalances. Macroeconomic determinants of optimal household and corporate saving, based on microeconomic theory, are used as explanatory variables in a benchmark panel regression model. Among other things, the model shows chronic oversaving of China and other Asian economies (Korea, Japan), and undersaving of the USA and the United Kingdom. Czechia and the other V4 countries showed no significant deviation from the model, nor did Germany or France.

This paper explores whether downward rigidity in nominal wages has negative impacts on the economy in the case of deflation caused by economic growth. In this situation, growth of real wages may be delivered by a fall in the price level even if nominal wages are constant. Hayek's proposal to stabilize MV is studied in detail. The nominal GDP is stabilized within this framework, and when potential output is growing, the price level might decrease. It is derived that this Hayekian rule would lead to a fall in nominal wages in an economy with positive population growth, which restricts the space for deflation. Friedman's proposal to stabilize prices of factors of production is also examined. It results in weaker deflation than Hayek's proposal and no need for decrease in nominal wages. The next part of the article demonstrates that the Hayekian framework may not require a fall in nominal wages in a converging economy if the labour share of income is gradually increasing, even if population growth is positive.

The objective of this study is to estimate effects of tax family benefits, social family benefits, availability of kindergartens and economic situation on fertility in the Czech Republic. The data cover the period 1993-2018 and come from the Czech Statistical Office and Czech legislation. The relationship between the variables and the total fertility rate as the dependent variable was analysed using regression analysis. The results show that fertility is positively affected by the supply of kindergartens and social family benefits. On the other hand, higher unemployment as an indicator of unfavourable economic situation decreases fertility. The effect of tax benefits was not statistically significant, which is not surprising, because tax family benefits are much lower in comparison with social family benefits. The model is limited by the number of variables and the number of observations; therefore, the model results should be taken as signals, not as definite answers.

The aim of this paper is to evaluate relative over-investment or under-investment of economies. To achieve this, we build a panel regression for 122 countries, where rates of investment and capital-output ratios are explained by key fundamental variables stemming from the theory in Chapter 1. We present implied-equilibrium values for both variables and all the countries in the sample. Countries of the former Soviet Union, the USA and Germany, for example, were identified as relatively underinvested. Large Asian economies such as China, India and Indonesia, and some countries of Latin America and Africa appeared to be overinvested. No significant imbalance was identified for Czechia, Slovakia and Hungary, while Poland showed to be rela- tively underinvested.

This paper addresses Czech international exports from 2000 to 2017. The goal of the paper is to determine whether the economic sanctions imposed on the Russian Federation by most of the Western countries, and especially the countermeasures adopted by the Kremlin, have exercised any significant effect on the Czech exports to Russia. The approach adopted is a gravity model and the results lead to the conclusion that the economic sanctions do not have any significant effect on the global Czech exports to Russia. Nevertheless, the sanctions affect the type of future economic cooperation between the Czech Republic and the Russian Federation.

This paper investigates the effects of economic growth on income inequality in EU countries by employing econometric models. We estimated the effect of growth on the share of income for all particular deciles of population and on the Gini. Other control variables were included in the models as well. The results showed a negative effect of economic growth on inequality, while this impact is the largest for the deciles ranging from the third to the seventh. This can be perceived as an indication of a shrinking middle class. Inequality-increasing effects were found for long-term unemployment, openness and partly for indicators of importance of the financial sector. Factors reducing inequality were rule of law and population with tertiary education. The size of government turned out to be a rather insignificant determinant.

The article aims to analyse the effects of the start-up subsidy programme for unemployed in the Czech Republic, which is provided by the Ministry of Labour and Social Affairs. We explored to what extent participants in the programme in 2014 returned to unemployment three years after the end of the programme, i.e., 2014-2017. Methodologically, we conducted counterfactual impact analysis, where we matched participants in the programme with those who were not supported by any measures of active labour market policy. The results show that participants in the programme return to unemployment to a lesser extent. In total, they spent fewer days in unemployment during the follow-up period, and they returned to unemployment fewer times when compared with non-participants. Overall, 91.3% of participants never returned to unemployment during the analysed period. These results can be interpreted as a positive outcome of the programme. The article also offers implications for targeting the programme and for future research.

Aggregate non-performing loans are the loans of a banking sector with delayed payments. This paper examines how aggregate non-performing loans (NPLs), as an indicator of aggregate credit risk, respond to macroeconomic developments in the Czech Republic. It uses data for the period 1993-2014 and the Bayesian estimation method of instrumental variables. This method exploits a priori information from similar studies for other countries and considers the potential endogeneity of macroeconomic developments vis-a-vis non-performing loans. The estimation results reveal a strong persistence of NPLs and a significantly positive and robust, effect of economic growth and income effect of the exchange rate on the financial condition of borrowers. We also find a significantly negative and robust effect of lending rates on the financial condition of borrowers. The effects of inflation and unemployment are significant but not as robust as the experience of other countries suggests. The balance sheet effect of the exchange rate is positive, but its significance is changing with model specifications. For economic policy, a timely, real depreciation of the koruna in response to rising credit risk could be an effective measure to stabilize the solvency of the banking sector.

This paper deals with allocation of financial resources from selected operational programmes among Czech regions and assess whether a regional innovation paradox occurs in the Czech Republic. Regional innovation paradox expresses a state when some regions with lower innovation performance and higher investment needs exist but at the same time these regions are not able to gain the offered resources. The article examines the relationship between amount of obtained resources and selected characteristics of regions through correlation analysis. The attention is focused on Operational programme Enterprise and Innovations and Operational programme Research and Development for Innovations. The analysis confirmed the existence of the regional innovation paradox in the Czech Republic. The paradox is apparent especially if the amount of subsidies is compared to the total regional gross domestic product. The paradox is in higher degree apparent at OP Research and Development for Innovations than OP Enterprise and Innovations.

During 1930s and 1940s Josef Macek developed monetary theory leading to monetary policy recommendations which are deeply influenced by macroeconomic theory of John Maynard Keynes. Macek became leading Czech left-wing keynesian. His theory of money was nominalist and similarly to J. M. Keynes and G. Cassel he elaborated the concept of managed fiat money. He critisized and disapproved the quantity theory of money. In his monetary theory and his monetary policy conclusions he was a forerunner of contemporary post-keynesian monetary theories. Money supply is in his monetary theory highely endogenous and he expressed certain doubts about effeciency of monetary policy measures as antirecessionary remedy.

This article proposes an approach to an interest rate analysis for purposes of risk management.of fi nancial portfolio consisting of assets or liabilities linked to interest rates and held to maturity in the Czech environment. Czech fi nancial market is characterized by relative underdevelopment and relatively low liquidity, and in an environment of high uncertainty due to interventions and regulations of central banks and other authorities. This article fi rst describes the volatility of the Czech koruna and euro interest rates using the GARCH model. Based on this description, relationships between levels of koruna and euro swaptions volatilities are determined. After obtaining estimates of koruna swaptions implied volatilities, the BGM interest rate model is applied to Czech koruna and euro interest rate simulations. They are then compared with the real development of given interest rates. It turns out that although the BGM model was developed for the purpose fi nancial derivatives valuation in the environment of developed and liquid fi nancial markets without signifi - cant distortions, resulting simulations are relatively good, and their use can improve interest rate risk management even in the Czech environment.

The article analyzes the possible impacts of the fully-funded (FF) pension system (the so-called Chilean model), which was introduced in the Czech Republic in 2012, on future pensions of contributors to the system and on state expenditures related to the pension system reform. The author performed calculations for 3 model examples of individuals who would participate solely in the FF and also of individuals who would contribute to both the pay-as-you-go (PAYG) and the FF during their lives. The calculations in all model examples were made for 4 average real annual interest rates and for 4 standardised income levels. The income replacement rates of the examined individuals were compared with the existing PAYG and with a hypothetical balanced PAYG. The aim was to determine the minimum rate of the pension funds' appreciation from whichthe transition to the FF would be profi table for all examined individuals. The article also attempts to identify the duration of the transition period, the moment after which the FF would become budget-neutral, and the approximate cost of the transition process.

The implementation of the Common Consolidated Corporate Tax Base (hereinafter as CCCTB) system will have the impact on the distribution of group tax bases across the EU, for the draft of CCCTB directive includes also the suggestion of allocation formula, based on which the group tax base should be allocated. As a consequence of this, it will also generate impact on tax revenues of individual EU Member States. The aim of the paper is to identify whether the implementation of CCCTB will result into the decrease or increase of corporate tax base in the Czech Republic in comparison with present situation - i.e. in situation when no group taxation or consolidation regimes are allowed in the Czech Republic. The results shows that Czech Republic would gain in the situation when CCCTB would be implemented in EU28, for its total allocated tax base would increase by 11,61%.