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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%.

The article formulates the general political-economic possibilities for smoothing of business cycles under the realistic assumptions of the current credit-economy. Firstly it endeavours to explain the mechanism of the financial and real economy functioning with an emphasis on banking sector. The initial theoretical model is considered as unrealistic but proper for demonstration of the consequences of money endogeneity, mechanism of banking financing and dependency of economic growth on credit growth and savings. On the basis of this explanation the article identifies the real causes of credit cycles in the current credit-economy and performs some relevant empirical evidence. The causes include insufficient credit growth, significant concentration of monetary assets, disproportionate development between inflation and excess money growth, deregulation, transmission of credit risk, deleveraging of private sector and imperfect steering of interest rates. Subsequently, author constitutes the basic political-economic tools which could possibly eliminate (or at least mitigate) both the deep and shallow recessions in ex-ante and ex-post periods. The study concludes that possible political-economic tools are following: traditional and non-traditional monetary policy, fiscal expansion, redistribution through progressive taxation, microeconomic and macroeconomic regulation. The entire study is based on US data.

The aim of the paper is to fi nd out what is the effect of different types of government spending and taxes on economic growth in developed economies. The analysis is performed on a sample of 27 OECD countries in the period 1997-2011. It is based on the neoclassic growth model extended with the level of human capital and fi scal variables. Those include particular types of government spending (according to the COFOG classifi cation) and taxes (according to the OECD classifi cation), and state budget defi cit. From a methodological point of view, panel data estimation is used. We support the view that only some types of government spending are growth-enhancing, and only if they are fi nanced through indirect taxes. However, the results show that only expenditure on defense, education and health, and general public services may be labeled as productive. In addition, we show that direct taxes, especially corporate taxes, negatively affect the growth, also in case they are used to fi nance productive spending.

Various theoretical perspectives on the current macroeconomic development of advanced economies, indicating a slowdown in economic growth and labour productivity accompanied by very low inflation, are discussed. Mainstream opinion has been emphasizing the threat of se-cular stagnation, which would require much looser monetary policy compared to past decades. On the other hand, opinions pointing to the limits and risks of a long-term loose monetary policy are analysed. Special attention is paid to the phenomenon of deflation. Biases of measurement of basic macroeconomic indicators in the age of digitization are discussed as well. As a possible way forward in monetary policy, incorporation of labour market indicators seems to be promising. In the age of digitization, labour market statistics are more reliable than indicators of output and/or inflation. An experimental example of a modified Taylor rule for the Czech economy provides supportive arguments for using available indica tors from the labour market in the process of monetary policy decision making to a greater extent compared to current practice.

The aim of this paper is to assess the impact of the economic crisis which commenced in 2008 on fertility levels across the EU, i.e., whether the onset of the crisis influenced the fertility trends and whether the various countries differed in terms of their response to the crisis. The relationship between the two economic indicators GDP per capita and unemployment rate and the total fertility rate as the dependent variable was explored employing panel regression models. Simultaneously, an investigation was conducted into which indicator better fits the modelling of the influence of macro-economic conditions of individual countries on the fertility levels. Data on 28 EU member states from the period 2001 to 2013 were included in the analysis. The results revealed that the onset of the economic crisis exerted a fundamental effect on fertility. In addition, it was found that the two economic indicators were interchangeable in terms of the effects exerted. In conclusion, it was determined that the findings support the supposition that fertility tends to be pro-cyclical in character.

In this paper, I empirically examine the relationship between telecommunications and economic growth. I use data for developing and developed countries for 2000–2016. My conclusion is that mobile penetration has a positive and significant impact on economic growth, where a onepercent increase in mobile penetration results in an increase in economic growth of 1.0–2.6 percent. Regulatory institutions have a positive and significant impact on penetration in developing countries; in developed countries, the impact of regulatory institutions is positive but not significant.

Considering the differences between public and non-public beneficiaries, the main aim of this paper is to evaluate the relationship between the disadvantage of Czech regions and the spatial distribution of EU structural funds in the programming period 2007–2013. The empirical results reveal negative and significant influence of socioeconomic disadvantage of regions on the amount of structural funds obtained by public beneficiaries. On the contrary, agglomeration economies are the statistically significant determinant of the amount of structural funds obtained by non-public beneficiaries. These conclusions are related to different absorption capacity of regions, regarding the number and size of projects. Overall, structural funds do not compensate for the disadvantage of regions, neither for public nor for non-public beneficiaries.

The aim of the paper is to analyse, model and compare selected macroeconomic variables of the Czech and Slovak economies and their dynamics using VAR models. This article shows an application of a selected model on real-time series of chosen macroeconomic indicators using four variables (R - interest rate, M - money supply (M2), P - price level (CPI), Y - GDP). We identify and test two long-run relationships. The following hypotheses have been confirmed: H₁: a change in monetary aggregate affects a change in price level and a change in economic growth; H₂: there is a causal relationship between GDP and M2; H₃: there is a direct correlation between interest rates and the price level anticipated in the Fisher equation. The following methods are used: Granger causality, impulse response function, cointegration and error correction models. In the end, econometric models of macroeconomic time series are compared in the Czech and Slovak economies. The calculations used EViews software.

This paper aims at finding out, whether the previous experience in Ukrainian construction sector increases the probability of doing the same job in the Czech construction sector. We assume that the integration of Czech and Ukrainian construction sectors led to the creation of structural channels directing Ukrainian labour migrants to the Czech Republic along the migration lines and facilitating the process of labour migration between these two countries. We employ the unique dataset created with the help of the survey conducted in Ukraine within the framework of Ukrainian migration project (UMP) in 2010-2012 and estimate multidimensional models in order to establish whether the previous experience in Ukrainian construction sector increases the probability of doing the same job in the Czech construction sector. Our results show strong empirical evidence for our hypotheses and are interpreted in the context of a broader economic restructuralization in the European Union.

The Czech Parliament approved a wide-ranging reform of direct taxes in 2011. Absent other legislative changes, the reform will come into force on January 1, 2015. We evaluate its impacts on the tax burdens and the average and marginal tax rates in a representative sample of Czech individuals and households. The main impact of the reform is a reduction in the average tax rates for the self-employed in the 5th through 10th income deciles, most frequently by 4.4 percentage points. The variation in the change in the average tax rates among the self-employed in low incomes deciles is large and varies between minus 5 to plus 5 percentage points. The reform would reduce the taxes for most employees only slightly but it would increase the average tax rate by up to 5 percentage points for employees with earnings exceeding four times the average wage. The effective marginal tax rates faced by the self-employed would drop most commonly by either 4.4 or 10-11 percentage points, while the effective marginal tax rates faced by employees would remain unchanged. The impacts on the households are highly heterogeneous depending on the share of income from self-employment in the household's total income. The reform would reduce the budget revenues by approximately CZK 19 billion.

In recent years, economic approach to human behavior has been challenged by contributions of cognitive science under the name of behavioral economics. As a result, two methodological strands in economics discord with each other: objectivistic (naturalistic) approach refuses the role of motivations in human behavior, adopting methods of natural science; subjectivistic (interpretative) approach, on the other hand, takes the teleological structure of human action as its corner stone. It is argued that position of the latter (esp. rational choice theory) has been undermined because it builds upon primitive version of human teleological structure. The paper shows that phenomenology offers a promising solution. Phenomenology identifies typical, invariant structures of human action and social world, with various degrees of their anonymity. If economic approach is founded on those structures adequately, then both rational choice theory and bounded rationality theories become compatible, as they differ in their degrees of anonymity only; they both belong to the body of (subjectivistic) economic approach to human behavior.

The article presents an alternative method to growth accounting. It makes it possible to express the effect of change in the quantity of inputs as well as the effect of the productivity of inputs (i.e. technological changes) on the change of GDP for all possible typologies of input/output changes. Unlike the growth accounting, this method is universal and also accurate; it may be applied not only to small growth rates. Dynamic parameters of intensity and extensity could be delivered as the output of the method. The first one captures the effect of change in the summary productivity of factors, while the latter captures changes in the input quantity. The dynamic parameters were calculated for the development of GDP in the United States and China for a period of fifty years (1960-2011). In case of the United States, it was also calculated how the development of labor and the development of capital contribute to the change in inputs. The calculated values verify that the method can reliably capture significant changes that took place in the given countries in individual years. The growth rate of the summary productivity of factors calculated on the basis of our method only differs slightly from the growth rate of the summary productivity of factors calculated on the basis of growth accounting. For all the aforementioned reasons, the method appears to be a suitable instrument for analyzing the GDP development.

This aim of the article is to determine the optimal tax policy horizon, and thus its strongest impact on economic growth in OECD countries. From a methodological point of view, the empirical analysis is based on a dynamic panel model, in which the data for the OECD countries in the period of 2000-2011 are used. The results confirm the economic theory about the negative impact of taxes on growth and show that the tax policy infl uences the growth the strongest with the 2-3 years lag. The analysis also confi rms that permanent tax changes in sense of increased taxation may not be as negative for growth if they are accompanied by effective tax collection and increase of tax revenues.

This paper deals with the spatial relationship between national and European regional policies. Spatial coherence of these two types of policies in two CEE countries - in the Czech Republic and Slovakia - is discussed. Our findings point at a higher spatial coherence of national and European regional policy in Slovakia. Thus, there is a higher financial allocation per 1 inhabitant in the nationally delimitated areas of special interest in Slovakia compared with the Czech Republic. Three aspects are discussed in this regard. First, different strategies of the delimitation of the areas of special interest in the both countries are emphasised. Second, different strategies of the implementation of the areas of special interest in programming documents in the both countries are upheld. Third, the factor of territorial absorption capacity is mentioned. We claim that the three aspects should be considered in achieving a higher spatial coherence of national and European regional policies.

The paper is concerned with the Czech privatization. According to the author, there was no economic theory of privatization in 1989. Therefore, decision makers in transition economies had to improvise and solve a dilemma: a fast, or slow privatization? The Czech literature on privatization as well as the strengths and weaknesses of privatization methods in the Czech Republic, including of the voucher one, are discussed. The paper argues against the pessimistic view on the Czech privatization, which predominated in the literature in the second half of the nineties.

The goal of this paper is to develop the theoretical framework of the public goods provision. This theoretic contribution is based on the critical analysis of mainstream economics theories dealing with public goods as market failure (neoclassical economics and neoliberalism) and on the results of own economic experiment examining the "free-riding" behaviour in the voluntary provision of public goods. The "free rider" problem is one of the main reasons for government intervention in the market. However, there is an inefficiency of public decision making on public provision and financing of selected goods because of the estimating goods values (ex-post consumer utility) problem. Moreover, the results of economic experiments do not support the pure "free rider" theory. However, the economic experiment simulates the real public good consumption that is why this paper contains also the survey of consumers' willingness to pay for specific public goods (public library services) in real terms based on the methodology of contingent valuation method.

Karel Kouba belongs among the most prominent Czech economists of the second half of the 20th century. The paper analyzes his major contribution to the Czech economic thought in the context of economic reforms of the Prague Spring of 1968 and of economic transition in 1990s. In the communist era special focus is devoted to the theory of growth in the socialist economies, compatibility of plan and market and his inclusion of individual motivations into decision-making of agents within the centrally planned economy. After the Velvet Revolution in 1989, K. Kouba showed the importance of microeconomic relations for the macrostability and the relevance of institutional economy for explaining the processes during the transition period. Kouba's story has also a more general message. It shows how the biggest talents were treated during the communist era in Czechoslovakia and which dilemmas they had to face.

The purpose of this paper is to create a financial fragility model for the Czech financial sector. We adapt the Goodhart-Tsomocos model which is based on general equilibrium with incomplete markets, money and default. The calibration of the model is based on publicly available data from the period 2003-2011. Finally, we perform comparative statics to show how the key variables of the model respond to possible events. The model can be used by government institutions to stress-test the banking sector, as well as by banking and other financial institutions to estimate the development of, inter alia, the default rates of their clients. The model also incorporates default of households and may be used, after further extension, in predicting households' default rates with respect to the behaviour of banks in consequence of changes in macroeconomic parameters of the environment.

The paper present a simple model of the future development of incomes and expenses of the old-age pension system in the Czech Republic (so called 1st pillar). The projection is based on the results of the latest available population projection published by the Czech Statistical Office in 2013. The expected number of employees (payers of the old-age insurance premium) is estimated on the basis of the sex and age structure of people in productive age and expected employment rates. All people at the age higher than retirement age are expected to receive old-age pension. The permanent increase of retirement age according to the present legislation is assumed. The computations show that the financial deficit of the old-age pension system would reach maximum values in the fifties when the numerous generations born in the seventies of the last century will reach the pension age. But in the last two decades of the present century the proportion of pensioners would be lower than at present times.

Economic education is considered of prime importance nowadays with direct implications for effectiveness of monetary policy. We aim to verify with an application of experimental method, whether economic education acquired has weakening or even suppressive effects on recently resurrected phenomenon of money illusion. If our hypothesis will be proved, previous evidence about signifi cant indirect effects of money illusion, causing significant long-lasting deviations of the economy from equilibrium after the shock, might be significantly alleviated, weakening thereby predictions of the New Keynesian model. Our findings suggest that even well-educated individuals do not have the ability to pierce the veil of money and do not form expectations properly after a fully anticipated monetary shock. As a result we can infer that money illusion is multiplied and nominal rigidities are intensifi ed even in the economy that consists of well-educated individuals.

The article documents the development of life satisfaction in four transitional Central European countries since 1991, in comparison with Germany and Austria. After presentation of data sources and the overview of the literature regarding the effect of transition on life satisfaction, surveys of European Values Study 1991, 1999 and 2008 are analysed together with macroeconomic data. First, satisfaction levels are correlated with GDP and then, individual characteristics of income, gender, education and family status are regressed to as explanatory variables of life satisfaction. While the explanatory power of GDP is found as very weak for the entire period, the effect of objective characteristics has peaked in 1999 and the effect of subjective perceptions in 2008. The survey information on trends after 2008 differs but no dramatic change of the life satisfaction due to the economic recession has so far appeared.

The aim of this paper is to explore the influence of public debt structure on economic growth of advanced economies. The investigation mainly focuses on shifts in public debt structure which does not change the level of debt quota. Methodical approach follows similar exercises developed to evaluate the effects of tax shifts on economic growth. Debt decompositions are made according to i) original maturity of instruments; ii) currencies; iii) residency of creditors; iv) kind of instrument. The panel data regression of 24 OECD countries in the period from 2000 to 2014 is used. The main findings suggest that the structure of public debt matters to economic growth in every decomposition made. Moreover, it was found that shifts in debt structure which are neutral towards the level of debt quota could be associated with changes of economic growth rates. Hence, it is legit to deal with adequate public debt structure not only with debt level in terms of influencing the economic growth.

A representative survey of adult population is used to analyse perceptions of existing income inequality and preferences for ideal income distribution in the Czech Republic. On average, Czechs view the distribution of disposable income as more unequal than it actually is. This biased perception results from underestimating total income shares belonging to bottom quintiles and overestimating the total income share belonging to the top income quintile. Whereas the majority of Czechs prefer some level of income stratification, there are about four tenths of people who would prefer to live in a completely equal society. These are primarily older, less educated and lower income people whose preferences formulated under uncertainty are mostly consistent with the maximin principle and inequality aversion. Almost a fifth of Czechs would prefer an income distribution consistent with efficiency concerns.

Public procurement is subject to very strict and detailed legal regulation, which generates significant transaction costs on the part of both the public and private sectors. This paper aims are to quantify the size of private transaction costs associated with participation in tenders and to identify the main factors that affect their value. The presented results are based on a survey containing 804 observations. The total value of the private transaction costs in 2012 is estimated at CZK 9 billion, which represents 1.8% of contracts value. Using regression model, we have identified factors that influence the size of transaction costs at the level of individual firms. These are relatively lower for larger contracts, supply contracts and also for more experienced companies. In contrast, higher values are found in smaller contracts, larger companies and companies that are more successful in tenders.

The aim of the paper is to present traditional and alternative look at the evolution of business cycle synchronisation in the European Union throughout four periods determined according to integration process. Gradually we apply cross-correlations and rather alternative minimum spanning tree method to evaluate synchronization process and core or peripheral countries. An endogeneity argument and decreasing asymmetries among integrated countries were confirmed with a light rupture during financial and economic crisis. Position of France and Germany as core countries was corroborated. However, single monetary policy should be implemented according to average macroeconomic evolution in the euro area and not according to particular situation in France and/or Germany which could be inappropriate for certain countries.

Advanced countries are losing their predominant position in the world economy. With the long-time productivity slowdown and the present long recession, a question arises about the threat of secular stagnation of the advanced world. In searching for the roots of this threat, leading world economistst accentuate either the demand side, or the supply side of the economy. In this respect, the authors add globalization as another important factor. Globalization has resulted in long-term global and internal imbalances, and caused deep problems in the advanced countries - deindustrialization, unemployment, growing dependence on the social safety net, and a permanent increase of government intrusion into the economy. After the 2008 crisis, fiscal and monetary policy concentrates on short-term support of economic recovery, leaving aside the deeper long-term deficiencies. With multiple negative trends acting in the same direction, the threat of secular stagnation should not be overlooked.