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For the purpose of monetary policy analyses dynamic multivariate models are usually applied. The reason is the presence of significant lags between an action and the appropriate effects in the economy. We use the concept of structural VAR models, widely used approach next to the DSGE and simultaneous equations models. We estimate four and five variable VAR containing the key macroeconomic indicators and identify monetary transmission mechanism using SVAR. Using different identification schemes and impulse response functions we compare the effect of a restrictive monetary policy shock on the set of analysed variables, especially price level. We also compare the results of defined models for the Czech and Polish economies, that both intend to enter EMU. To avoid the possibility of a price puzzle effect, as a result of mixing policy regimes in the sample period, we use data from single monetary policy regime starting 1998, when the Czech central bank switched to the inflation targeting regime. The results indicate high sensitivity to the identification schemes in SVAR and not significant differences between responses to monetary policy shock in CR and Poland.

The aim of the article is to answer the question if the Czech stock market price dynamics is generated by non-linear deterministic dynamic process. To solve this complex problem requires using sophisticated computational operations to analyze huge amount of data input. To overcome this obstacle the visual recurrence analysis is applied in this article. This method enables visualization of the state space reconstructed from a time series in the so called recurrent plot. Further, it quantifies various geometric structures occurred in recurrent plots and gives us more exact information about the nature of the underlying process generating the time series. This analysis is then applied to the most liquid stock returns and the Czech stock market index PX series

The first question that we ask ourselves in our article is whether the accounting of the central bank is supposed to respect the principles of internationally accepted standards (especially the International Financial Reporting Standards). We are looking for the basic differences in understanding of terms such as (il)liquidity and (in)solvency on the level of central and commercial banking. We analyze the economic reasons for origination of the long foreign exchange position of the ČNB which, under the circumstances of trend appreciation of the exchange rate of the Czech crown, is leading to a cumulative loss. We are discussing whether the current level of foreign exchange reserves of the ČNB is excessive or adequate. Special attention is paid to the monetary and financial impact of the loss of the central bank. We are pointing out that losing the central bank means profit for market subjects at the same time. It is not just a "fictitious" accounting problem and it can have its factual impact on the national economy. At the end we are summarizing and assessing the individual opinions regarding the loss of the ČNB.

This study presents an analysis of the sources of variability of interest rates in the money market in the context of Czech National Bank's (CNB) monetary policy. The factors in question are changes in the structural characteristics of economies in transition, changing perception of inflation risks, the inconsistency of central bank's monetary decisions and central bank's weakened credibility and uncertainty about the efficient transmission of monetary measures. The empirical analysis documents non-stationary variability of ultra short-term PRIBOR interest rates and stability of longer maturity PRIBOR interest rates. These results reflect the role of CNB in bank system liquidity management, the uncertainty about the timing of CNB's monetary policy at the changing speed of the appreciation of the crown, tendencies of overestimation of expected inflation and changing structural characteristics.

Our study contains application of Latent Semantic Indexing on financial crises prediction. Hypothesis to test was that equity markets are able to predict even sharp changes in monetary policy during a quarter ahead of such a change (which was searched during two quarters that followed). This hypothesis, tested on sample of 36 countries between years 1985 and 2007, has been confirmed according to interest rate and foreign exchange expert interpretation. The studied application of LSI even though it timed several crises on their exact start day is not suitable for financial crises prediction but can be recommended for specification and analysis of fragile countries which are or could be prone to a crisis.

Paper inquires into historical development of key theoretical concepts related to purchasing power parity in 20th century. It presents theories which explain relation between price level, labor productivity and exchange rate. These theories explain the process of how the long-run equilibrium exchange rate is being achieved. On the other hand it elaborates on short-run exchange rate deviations. As the key factor which cause the deviations identified in the paper is presence of the prices of non-tradable goods in price indexes. Proposed is a case study which clarifies the process of equilibrium exchange rate achieving to emphasis some of the theoretical conclusions made in paper. Verification of theoretical conclusions is sketched out through the Big Mac Index statistics. Statistics is to prove proposed relations between price levels and exchange rates in different countries and is to verify the relevance of theoretical conclusions about long-run equilibrium of exchange rates.

This article focuses on common and different attributes of education and health from economic and social perspective. Education and health are not usually analyzed together so this could be considered to be an innovative approach. Article contains knowledge which reflects empirically known dependencies in the area of education and health determinants and relationships of education and health to human capital. It also emphasizes and argues for the importance of lifelong learning and availability of high-quality health care as economic development prerequisites. While the education and health is by its own nature bound to an individual and its investments, the question of equal chances to educate and consume health care is highly important in the modern society. Based on the identified attributes and relationships of education and health, the article shows their economic characteristic, social aspects and summarizes their importance for the economic development.

The article deals with the role of the central banks in advanced market economies and the theoretical possibility of abolishing these institutions. Central banks have monopolies in some areas, especially regarding monetary policy. In many countries, central banks also have monopolies in other areas, for example in the payment and clearing transactions for banks and the state. In the context of the financial crises, there have been calls for the abolition of central banks and the restoration of money fully-backed by gold and issued by different subjects. The main reasoning behind these requests is connected with the accusation that central banks have been the basic culprits in the current crisis, because of their monopoly of the issuing money. This argument fails to recognize that central banks do not have a monopoly in issuing money as the dominant share of the money creation is attached with the process of multiplication of demand deposits by commercial banks. Restoration of the money backed by gold is furthermore completely unrealistic. The article discusses the shortage of gold stock as one of many reasons why gold is not suitable for monetary purposes.

This article is focused on the composition and development of the so called Scandinavian approach of economic policy. The first part describes it's three main posts, this is labour market, public sector and social equality. Two main streams of the Sveeden labour market policy are centralised wage bargaining managed by Rehn-Meidner model under motto "equal wage for equal work" which was after years transformed into "equal wage" and the so called active labour market policy. The second part deals with macroeconomics policy and not much known progressive market regulation and competition obstacles and the third part introduces the Sweden tax system with it's highly progressive tax rates and it's 1985 and 1991 tax reform.

Neoclassical environmental economics, ecological economics and free market approaches to environmental protection are currently three main schools of thoughts that are systematically focused on interactions between the society and the environment. They all have strong defenders as well as opponents. Although the environmental economics is still considered as mainstream, the critique from alternative approaches is increasing. The goal of the article is to briefly introduce main thoughts of all three schools and their interactions. The intensity of mutual interactions in the last decade was investigated via the analysis of articles published in high-rated journals.

The paper presents the evolution of the natural monopoly term in the economic literature. Using the citations of the authors the article shows various approaches to the natural monopoly concept from the very beginning till nowadays. The definition of natural monopoly has been changing over time and even today there is not the only one view used widespread.

The Czech Republic is going to face ageing of its population. It will affect the economy in many ways. The pension system is one of them. This paper provides a view on possibilities how to insure long-term stability of the pension system in the Czech Republic using a mix of pay-as-you-go and fully funded system. Simulations are based on OLG model, long-term demographic forecast and limits of fiscal policy stemming from the necessity to fulfill Maastricht criteria and The Stability and Growth Pact. Those obligations creates a frontier for plausible solutions. Results suggest that it is possible to find a solution for mixed system providing more favorable conditions than purely parametric changes of PAYG. Taking into account fiscal limits, the contribution rate to the FF pillar would be similar to the rates in other CEE countries where pension reform already started.

The study focuses on patterns and trends in concentration in the Czech manufacturing during the period 1989 - 1997. In the 90s Czech manufacturing experienced rapid and deep change in the market structures. Most of manufacturing markets de-concentrated between 1989 - 1995. Rapid change occurred between 1989 and 1992, small change between 1994 - 1997. During last two years tendency towards new concentration can be observed in selected markets. As by 1997, one fifths of manufacturing production has been produced on the markets where share of largest producer was more than 50 %. In the Czech manufacturing, monopoly and oligopoly market structures survived or newly emerged also in some markets in which technological advantage of high concentration cannon be proved by comparison of concentration levels with selected EU markets.

Slovak Republic entered the ERM II in the end of 2005 whereby it came nearer to its strategic objective - joining the euro area. In this paper we try to answer two questions. Section 1 examines the features and risks of the EMU. Is EMU an optimum currency area and what is the OCA scorecard of euro area? We conclude that euro area - in spite of its indisputable benefits - is rather a premature monetary union with asymmetric monetary policy effects and other policy asymmetries. Section 2 analyzes possible effects of the EMU on the Slovak economy. We examine the experience of other countries and compare their real convergence to average level of euro area before and after joining the EMU. The readiness of Slovak economy for euro adoption, possible obstacles on this uneasy way and the connection between income level, price level and real convergence are analysed at the end of the paper.

The current record wave of immigration is a problem and does not conform to the interests of most people in Europe. Immigration is ineffective as a global development policy. The article argues in favor of an immigration that is balanced and that is in the interests of citizens in Europe rather than just in the interests of potential immigrants, recent immigrants and businesses that like cheap labor. First section of the article perceives immigration in the context of the public debate. Second section calls attention to the record wave of immigration to Europe. Third section asks a question of who are the winners and losers of immigration. Forth section analyses free movement of people in the EU. Fifth section explains why immigration is not remedy to population aging. Sixth section is concerned with the strengths and weaknesses of multiculturalism. Seventh section draws attention to the problem of democratic legitimacy. Eighth section asks a question of whether there is a rational immigration policy.

The paper focuses on selective investment incentives. The main aim is to discuss question how to quantify net fiscal impact properly. As shown, the problem is not trivial - the proper quantification presupposes using of several parameters, accounting of costs in the economic sense of this word (i.e. also opportunity costs) and using concept of present value. Including these aspects in the calculation would correct some extremely optimistic scenarios (of studies concerning Czech economy), which claim, that fiscal incentives yield significantly high net surplus to the state budget. The parameter representing the ability of incentives to attract investors seems to be one of the most important components of the correct calculation. Another important point is a necessity of symmetric accounting: some of the other studies implement two expenditures rounds on the side of fiscal benefits, whereas they neglect the second round on the side of costs.

We show that the cusp catastrophe model explains the crash of stock exchanges much better than other models. On the data of U.S. stock markets we demonstrate that the crash of 1987 may be better explained by cusp catastrophe theory, which is not true for the crash of 2001. With the help of sentiment measures, such as index put/call options ratio and volume (the former models the proportion of the chartists, while the latter the fundamentalists), we have found that the 1987 returns are clearly bimodal and contain bifurcation flags. The cusp catastrophe model fits these data better then alternative models. Therefore we may say that the crash may have been led by internal forces. However, the causes for the crash of Sept. 11, 2001 are external, which is also evident in much weaker presence of bifurcations in the data. Thus alterantive models may be used for its explanation.

The article solves the incentives to the different exchange rate arrangement choice during the transformation and integration period in the Central and East European countries. It follows with the analysis of the industry structure in these economies. It is discussed the existence of its direct and indirect channel of influencing the exchange rate politics. Article solves the hypothesis of interest group formation in regard to the exchange rate policy (the euro adoption) and the intergovernmental bargaining and the bargaining within the economy. The industry analysis results confirm the set hypothesis, in which the heterogeneity of industry structure explains the heterogeneous approach to the exchange rate politics during the transformation process in monitored economies. Finally, the redistributive change of Hungarian exchange rate policy is discussed in connection with the change of subsidies flow within the political cycle.

This paper starts with discussion about enhanced and frequently used conceptions of free markets, market failures and market primacy. There are pointed some simplifications due to the man should be prospective while using them, especially in applied economics. We have no positive definition of a free market and it is not clear, how often and if any we can observe such market about us. Troubles with market failures are derived from different meanings in different schools of economic thought. The market primacy is an abstract concept more than historical fact. Because of such difficulties the paper is inscribed to institutional alternative which is able to evolve complex research of institutions and to involve useful aspects of neoclassical economics. Useful ground for this analysis is institutional individualism which defines program for research of institutional framework of economy.

The paper analyzes the relationship between interest rate transmission mechanism and bank's management of interest rate risk during the disinflation monetary policy in the Czech Republic in 1999-2006. In theoretical part, main determinants of short-run and long-run equilibrium of client interest rates are discussed (market power, duration of credits and deposits, pricing mechanism, credit risk, operation efficiency). Using the error correction model, sensitivity of credit and deposit interest rates on market interest rates is tested. It is found out that in the short equilibrium client interest rates changes follow dynamics of CNB repo rate, the sensitivity of credit and deposit interest rates differs and banks face up the pressure on interest margin. The cointegration analysis confirms change of equilibrium interest rate margin in the long-run and supports hypothesis of consistency between Czech National Bank monetary policy and its expected outcomes by banks.

Learning is a subject of intense research in economics. We present persuasive evidence that learning took place among uninformed heterogeneous agents during a large-scale naturally-occurring set of auctions. Empirical study employs a unique bidding data set of 5000 individual investors that placed their bids in the voucher scheme that in terms of size, incentives, and variation is one of the largest experiments ever conducted. To detect and quantify learning we develop new measures of individual performance during the bidding process on the artificial stock market where prices of goods vary over successive stages of bidding on the basis of supply and demand.

The paper deals with the relationships between the inflow of FDI in the Czech economy and the Czech labour market. First part is focused on general issues related to the FDI inflows and to the analysis of the penetration of the foreign controlled companies into domestic economy. Special attendance is devoted to the scope and developments of the duality in the Czech economy, in particular in its key segment - manufacturing industry. The findings indicate gradual and differentiated diminishing of the scope of duality in the Czech manufacturing. The necessary conditions for positive spillovers of FDI into the domestic economy have been outlined, with flexible and qualified labour force being a very important channel of the transfer of technology. Therefore the impacts of FDI on the Czech labour market have been analyzed from the regional and industrial viewpoint. Low flexibility of the Czech labour market has been one of the reasons behind still considerable scope of duality in the Czech manufacturing.

Efficient Market Hypothesis has dominated the field of research on capital market theory. It postulates that asset prices are rationally connected to economic realities and always incorporate all the information available to the market. A huge quantity of theoretical works around the world have been devoted to testing this hypothesis. In this paper, the weak form of the Efficient Market Hypothesis is tested on data from the Czech stock market of period 1996-2006. The tested hypothesis is verified by both linear and nonlinear methods. Those linear are: Box-Pierce test, variance ratio test, test of sequences and reversals nad Hurst exponent. The nonlinear ones are: White test, Engle test, Hinich test and BDS test. These tests are carried on stock returns time series of Czech stock market index PX and individual stocks as Telefónica, Komerční banka and ČEZ and series with randomly changed order from original series. The results of the testing indicate that returns, when randomly permutated, are independent, hence they follow a random walk. But it is impossible to maintain it in case of original returns series.It implies that returns of either Czech stock market index or its stocks are not independent and do not follow a random walk.

The text considers one of the prevailing dilemmas for the time being practical valuers of assets are exposed to - the operability of market value in terms of International Valuation Standards. The issue is considered theoretically, practical impacts are outlined as well. Considering the microeconomic basis of market structure and price determination, the prerequisites for an "objective" market value are summed. The International Valuation Standards are explained as an evolutionary evolved institution, which suffers under deep impact of neoclassical methodology. At the end there are drawn some conclusions for the regulation of valuation in the Czech Republic.

The article is concerned with the economics of religion. The first chapter is introduction into the economics of religion by Adam Smith. The second chapter asks the question whether the secularization hypothesis is tenable. The third chapter analyzes the allocation of time and church attendance and investments into religious capital. The forth chapter examines religious market in perfect or imperfect competition. The fifth chapter summarizes empirical research. The sixth chapter brings conclusions.

This study thoroughly analyzes the stock market efficiency hypothesis - its weak form - in the Czech Republic, Poland and Hungary in 1995-2005. It aims to reveal whether trading on historical information about stock prices or indices may lead to economically significant abnormal profits and whether the analyzed markets are comparably efficient. It also tests relative efficiency of the Central European markets compared to developed capital markets that are considered the most effective - the American NYSE, German and Netherlands stock exchanges. Complexity of the results is enhanced by analyzing daily, weekly and monthly returns of both the major regional indices - the Czech PX-50 and PX-D, Hungarian BUX and Polish WIG20 - and individual shares that constitute the indices. Moreover, consequences of the non-synchronous trading for autocorrelations are discussed. In conclusion, the Central European region must be considered as a heterogeneous market. While the Hungarian market generally complies with the hypothesis and behaves weakly efficient, significant linear dependences are typical for the Czech stock market. Some unsystematic departures from the random walk model persist in Poland and the efficiency market hypothesis can not be validated there. Any abnormally profitable investment strategy that exploits technical analysis should thus avoid Hungarian stocks and exploit short-term dependences on the Czech and, to a lesser extant, Polish stock market.

The paper deals with theoretical and empirical aspects of the interactions between monetary policy and swap rates in the Czech Republic in 1999 through to 2005. In the theoretical part main sources of volatility of swap and forward rates on changes of repo rate are studied (actual stage of business cycle and changing level of monetary restriction, investor's misunderstanding of future main policy rate dynamics or inconsistency between expected monetary policy outcomes and actual dynamics of real level of repo rate). The empirical analysis proved low sensitivity of Czech crowns swap and forward rates to CNB repo rate changes, high volatility of interest rates relations in case of long-lasting repo rate changes and also problems with CNB's credibility at the beginning of 2000's. It was also found out that investor's mid-term and long-term inflation expectation could differ substantially due to expected convergence of economy to low inflation economic system.

The efficiency of macroeconomic policies depends on adequate business cycle approximation. Given that potential output and the output gap (the difference between actual and potential output) are not directly observable, their values need to be estimated using alternative statistical, structural, and combined techniques. In this paper the Hodrick-Prescott filter and the Cobb-Douglass production function has been applied on the Slovak conditions. The pross and coins of both methods are analysed. The Hodrick-Prescott filter does not capture the structural changes, which were significant especially in the first half of analysed period. Thus the Cobb-Douglass production function seems to be more appropriate. It enables to detect particular factors of potential output growth as technological progress, capital and labour. Despite of potential shortcomings, this approach is still widely used by international institutions, governments and researchers.

The paper deals with yield curve construction methods using coupon bonds in Czech bond market. Generally, there are more possibilities how to approach this problem: bootstraping, splines, parametric functions. Due to the lack of tradable public bonds and due to the fact that existing bonds do not pay coupons at the same date of the year, traditional bootstraping method could not be applied under Czech market conditions. It seemed appropriate to use parametrical solutions to the yield curve issue and minimise the sum of squares of differences between market and theoretical prices. There were presented three function types which arrived to similar results in the paper. The authors also used Svensson parametric function to demonstrate the possible use of parametric yield curve construction. It was shown that, after duration adjustment, it can indicate shift in market expectations regarding future short term interest rate moves, and thus regarding future monetary policy, pretty well.

The competitive ability of the processing industry in the SR occurs most often in classical types of production characterised by lower level of added value. Commodities with a low added value participate in worsening the balance of trade of the SR. The high export demand of industrial production also contributes to it. The changes in branch structure of processing industry of the SR are continuously reflected in a change of foreign trade structure. Its orientation is on the products less demanding and primarily on raw materials and energetic sources. In spite of this there is visible the tendency to be focused on exports in lower added value products in Slovak processing industry. The worsening of Slovak processing industry status is visible in the commodities where the export is confronted with new industrialized countries production (mainly in textile industry) but also with countries so-called "mono-cultural" (food, drinks, tobacco). In the given examples there is a strong tendency in the SR to lower the trade volume with these commodities. The analysis results show the increase of traffic means in Slovak foreign trade. Automobile industry is coming to the top and it has become the basic branch of the Slovak industry. The trend of development is from one point of view positive not only from the point of view of volume but also from the investment structures from the side of big investors. But on the other hand the SR has become, by this development, more sensible to fluctuation on the world markets. Processing industry is behind in its competitive ability in comparison with high-tech branches. The causes of it are low expenditures for research and development that should be used in these branches and they subsequently cause the low level of creating the level of added value. Marked falling behind in competitive ability of these branches is shown in their low shares in a foreign trade.