This paper presents a calculation of the estimated value of the time of old age pension receipt for individual birth cohorts of Czech males and females born in the period 1900-2020. It is assumed that people start to receive the pension at the moment of reaching retirement age and receive it until death. Starting with the birth cohort of 1966, two variants of retirement age determination are assumed: (a) a fixed retirement age threshold equal to 65 years for both males and females; and (b) a flexible retirement age (equal for males and females) defined in such a way that the average time of pension receipt would be equal to one quarter of the total expected total life span of people reaching senior age. The average lengths of pension receipt as well as the structure of adult persons from each birth cohort according to five-year time intervals of pension receipt (including the proportion of adult persons not surviving until retirement age) in the future are presented. Cohort life tables were used for calculations.
{"title":"Distribution of Expected Time of Old-age Pension Receipt in Czechia","authors":"T. Fiala, J. Langhamrová","doi":"10.18267/j.pep.785","DOIUrl":"https://doi.org/10.18267/j.pep.785","url":null,"abstract":"This paper presents a calculation of the estimated value of the time of old age pension receipt for individual birth cohorts of Czech males and females born in the period 1900-2020. It is assumed that people start to receive the pension at the moment of reaching retirement age and receive it until death. Starting with the birth cohort of 1966, two variants of retirement age determination are assumed: (a) a fixed retirement age threshold equal to 65 years for both males and females; and (b) a flexible retirement age (equal for males and females) defined in such a way that the average time of pension receipt would be equal to one quarter of the total expected total life span of people reaching senior age. The average lengths of pension receipt as well as the structure of adult persons from each birth cohort according to five-year time intervals of pension receipt (including the proportion of adult persons not surviving until retirement age) in the future are presented. Cohort life tables were used for calculations.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2021-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45096554","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article aims to analyse the issue of a lack of rules on the insurance cover of interest from an OECD perspective during the period 2010-2020. Export credit agencies (ECAs) support export and apply minimum premium rates (MPRs) to the principal amount only, while the insurance agreement covers also the interest amount. This area can be described as a grey zone, because ECAs can decide themselves what cover they provide for a limited price. This paper explains which parts of a lending rate should be covered under credit insurance and provides theoretical and empirical analysis of the maximum extent of interest cover. The extent of such cover is closely related to the return on ECAs' investments. An excessive amount of interest cover creates room for market failures such as moral hazard or adverse selection, which have a negative impact on the domestic economy. The right amount of interest cover, on the other hand, guarantees long-term sustainability and a level playing field among ECAs, as the OECD requires.
{"title":"Fair Insurance Cover for Export Credit Under OECD Pricing Framework","authors":"Mikuláš Pýcha","doi":"10.18267/j.pep.779","DOIUrl":"https://doi.org/10.18267/j.pep.779","url":null,"abstract":"This article aims to analyse the issue of a lack of rules on the insurance cover of interest from an OECD perspective during the period 2010-2020. Export credit agencies (ECAs) support export and apply minimum premium rates (MPRs) to the principal amount only, while the insurance agreement covers also the interest amount. This area can be described as a grey zone, because ECAs can decide themselves what cover they provide for a limited price. This paper explains which parts of a lending rate should be covered under credit insurance and provides theoretical and empirical analysis of the maximum extent of interest cover. The extent of such cover is closely related to the return on ECAs' investments. An excessive amount of interest cover creates room for market failures such as moral hazard or adverse selection, which have a negative impact on the domestic economy. The right amount of interest cover, on the other hand, guarantees long-term sustainability and a level playing field among ECAs, as the OECD requires.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2021-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41804944","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Vladan Holcner, Monika Davidová, J. Neubauer, Ľubomír Kubínyi, Aloiz Flachbart
The article presents an empirical analysis of the relation between recruitment in the all-volunteer Czech Armed Forces and selected economic indicators, including actual economic performance, situation on the domestic labour market and development of defence expenditures based on data for the period 2005-2019. The relation between military recruitment and economic performance was examined using values of GDP and GDP dynamics (GDP index). General unemployment rate, the economic activity index and the military-to-general average wage ratio were used to analyse the relation of military recruitment and situation on the domestic labour market. The relation between military recruitment and defence expenditures was examined based on general defence burden (share of defence expenditures in GDP), state sector defence burden (share of defence expenditures in state budget expenditures) and year‑on‑year changes in defence expenditures.
{"title":"Military Recruitment and Czech Labour Market","authors":"Vladan Holcner, Monika Davidová, J. Neubauer, Ľubomír Kubínyi, Aloiz Flachbart","doi":"10.18267/J.PEP.778","DOIUrl":"https://doi.org/10.18267/J.PEP.778","url":null,"abstract":"The article presents an empirical analysis of the relation between recruitment in the all-volunteer Czech Armed Forces and selected economic indicators, including actual economic performance, situation on the domestic labour market and development of defence expenditures based on data for the period 2005-2019. The relation between military recruitment and economic performance was examined using values of GDP and GDP dynamics (GDP index). General unemployment rate, the economic activity index and the military-to-general average wage ratio were used to analyse the relation of military recruitment and situation on the domestic labour market. The relation between military recruitment and defence expenditures was examined based on general defence burden (share of defence expenditures in GDP), state sector defence burden (share of defence expenditures in state budget expenditures) and year‑on‑year changes in defence expenditures.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2021-06-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43501942","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study aims to investigate the impact of international remittances on income inequality in the post-communist region. The association between the variables is examined via static and dynamic panel models. Using macroeconomic data from 27 countries over the period 1991-2014, we discover that income inequality progresses along a U-shaped course as a country becomes more dependent on remittances. For most of the countries, the relationship between remittances and inequality is inverse. When remittances account for more than 20% of GDP, they exacerbate economic inequality. This finding challenges the view that remittances should only be viewed as a pro-poor redistribution mechanism because in certain cases, additional migrant transfers may actually increase income inequality.
{"title":"Remittances and Inequality: The Post-Communist Region","authors":"Azizbek Tokhirov, Jaromír Harmáček, M. Syrovátka","doi":"10.18267/J.PEP.776","DOIUrl":"https://doi.org/10.18267/J.PEP.776","url":null,"abstract":"This study aims to investigate the impact of international remittances on income inequality in the post-communist region. The association between the variables is examined via static and dynamic panel models. Using macroeconomic data from 27 countries over the period 1991-2014, we discover that income inequality progresses along a U-shaped course as a country becomes more dependent on remittances. For most of the countries, the relationship between remittances and inequality is inverse. When remittances account for more than 20% of GDP, they exacerbate economic inequality. This finding challenges the view that remittances should only be viewed as a pro-poor redistribution mechanism because in certain cases, additional migrant transfers may actually increase income inequality.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2021-06-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49137932","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The aim of this study is to provide an overview of the principles of IFRS 9 implementation and to analyse its impact on the Czech banking sector. Unlike the previous IAS 39 standard, valid until the end of 2017, the new accounting rules require banks to estimate forward-looking expected credit losses (ECL) while considering relevant exposure level information as well as available macroeconomic predictions. Due to the increased complexity of the ECL models and changing macroeconomic expectations, we hypothesize that the new standard leads to increased volatility of loan loss allowances. This hypothesis is empirically tested and more or less confirmed by an analysis of the quarterly flows of allowances for a sample of large Czech banks from the years 2016-2017 under IAS 39 and from 2018-2019 under IFRS 9.
{"title":"Impact of Implementation of IFRS 9 on Czech Banking Sector","authors":"Oľga Pastiranová, J. Witzany","doi":"10.18267/J.PEP.775","DOIUrl":"https://doi.org/10.18267/J.PEP.775","url":null,"abstract":"The aim of this study is to provide an overview of the principles of IFRS 9 implementation and to analyse its impact on the Czech banking sector. Unlike the previous IAS 39 standard, valid until the end of 2017, the new accounting rules require banks to estimate forward-looking expected credit losses (ECL) while considering relevant exposure level information as well as available macroeconomic predictions. Due to the increased complexity of the ECL models and changing macroeconomic expectations, we hypothesize that the new standard leads to increased volatility of loan loss allowances. This hypothesis is empirically tested and more or less confirmed by an analysis of the quarterly flows of allowances for a sample of large Czech banks from the years 2016-2017 under IAS 39 and from 2018-2019 under IFRS 9.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2021-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48363119","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The aim of this paper is to analyse and evaluate the directions of changes in the development of entrepreneurship in the regions of the Visegrad Group countries, i.e., the Czech Republic, Poland, Slovakia and Hungary, in the period 2004-2018. We carried out research using an entrepreneurship model based on the Global Entrepreneurship Monitor (GEM) methodology. The literature analysis made it possible to formulate the main research hypothesis, which states that the factors of entrepreneurship development in this period had a different impact on the establishment of enterprises at the level of regions in the Visegrad Group countries. Assigning individual regions of these countries to entrepreneurship classes in the investigated years showed significant differences, which means that the NUTS 2 regions of the Visegrad Group countries differ significantly in terms of entrepreneurship development conditions.
{"title":"Conditions for Development of Entrepreneurship in Regions of Visegrad Group Countries","authors":"M. Jabłońska, J. Filá","doi":"10.18267/J.PEP.777","DOIUrl":"https://doi.org/10.18267/J.PEP.777","url":null,"abstract":"The aim of this paper is to analyse and evaluate the directions of changes in the development of entrepreneurship in the regions of the Visegrad Group countries, i.e., the Czech Republic, Poland, Slovakia and Hungary, in the period 2004-2018. We carried out research using an entrepreneurship model based on the Global Entrepreneurship Monitor (GEM) methodology. The literature analysis made it possible to formulate the main research hypothesis, which states that the factors of entrepreneurship development in this period had a different impact on the establishment of enterprises at the level of regions in the Visegrad Group countries. Assigning individual regions of these countries to entrepreneurship classes in the investigated years showed significant differences, which means that the NUTS 2 regions of the Visegrad Group countries differ significantly in terms of entrepreneurship development conditions.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2021-05-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45486797","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate how increases in minimum wage affect various firm-level characteristics. We study firm-level data from Poland, where the minimum wage experienced a large and persistent increase in 2008 and 2009. We show that firms which were more exposed to the minimum wage increase faced higher increases in total labour costs and larger reductions in profitability. Intuitively, higher total labour costs driven by higher minimum wages directly reduce firm profits in the absence of price adjustments. We also show that the sharp increases in the minimum wage increased capital and decreased overall labour productivity and employment. The impact of policy is statistically significant only on capital.
{"title":"Firm-level Effects of Minimum Wages","authors":"O. Chorna","doi":"10.18267/J.PEP.773","DOIUrl":"https://doi.org/10.18267/J.PEP.773","url":null,"abstract":"We investigate how increases in minimum wage affect various firm-level characteristics. We study firm-level data from Poland, where the minimum wage experienced a large and persistent increase in 2008 and 2009. We show that firms which were more exposed to the minimum wage increase faced higher increases in total labour costs and larger reductions in profitability. Intuitively, higher total labour costs driven by higher minimum wages directly reduce firm profits in the absence of price adjustments. We also show that the sharp increases in the minimum wage increased capital and decreased overall labour productivity and employment. The impact of policy is statistically significant only on capital.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2021-03-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48195889","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Z. Toušek, Barbora Malinska, Martin Prokop, D. Procházka
{"title":"The Effect of Financial Leverage on Operating Performance: Evidence from the Czech Republic","authors":"Z. Toušek, Barbora Malinska, Martin Prokop, D. Procházka","doi":"10.18267/J.PEP.774","DOIUrl":"https://doi.org/10.18267/J.PEP.774","url":null,"abstract":"","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2021-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41916719","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Random forest models have recently gained popularity for economic forecasting. Earlier studies demonstrated their potential to provide early warnings of recession and serve as a competitive method to older prediction models. This study offers the first evaluation of the random forest forecast for the Czech economy. The one-step-ahead forecasting results show high accuracy on the Czech data and are proven to outperform forecasts from the Czech Ministry of Finance and the Czech National Bank. The following multi-step random forest forecast, estimated for the next four quarters, shows results similar to those from the central institutions. The main difference stems from the household and industrial confidence variables, which significantly impact on the random forest forecast. The variable-importance analysis further emphasizes the soft variables as valuable determinants for Czech forecasting. Overall, the findings motivate other forecasters to exercise this method.
{"title":"Random Forest as a Model for Czech Forecasting","authors":"Kateřina Gawthorpe","doi":"10.18267/J.PEP.765","DOIUrl":"https://doi.org/10.18267/J.PEP.765","url":null,"abstract":"Random forest models have recently gained popularity for economic forecasting. Earlier studies demonstrated their potential to provide early warnings of recession and serve as a competitive method to older prediction models. This study offers the first evaluation of the random forest forecast for the Czech economy. The one-step-ahead forecasting results show high accuracy on the Czech data and are proven to outperform forecasts from the Czech Ministry of Finance and the Czech National Bank. The following multi-step random forest forecast, estimated for the next four quarters, shows results similar to those from the central institutions. The main difference stems from the household and industrial confidence variables, which significantly impact on the random forest forecast. The variable-importance analysis further emphasizes the soft variables as valuable determinants for Czech forecasting. Overall, the findings motivate other forecasters to exercise this method.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2021-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49203127","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
J. Pokrivčák, Marián Tóth, P. Ciaian, Martin Busík, A. Svorenčík
Annually the Common Agricultural Policy (CAP) provides support to the farming sector amounting to more than EUR 50 billion in the EU, of which direct payments (DPs) take around 70%. DPs are often argued to be granted unfairly to large farms. In this paper we analyse implications and the political economy of DP capping in Slovakia in the context of the ongoing negations about the future CAP reform. The simulation results for Slovakia show that if the 2018 Commission proposal was approved it would lead to losses of EUR 190.1 million (68% of total DPs) to large farms when labour costs are not subtracted. These losses would decrease to only EUR 12.2 million (4.4% of total DPs) when the labour costs are subtracted. Further, the results show that potentially affected large farms in Slovakia show lower performance and lower compliance with the agricultural policy objectives than farms unaffected by the DP capping. Similar to the past CAP reforms, the position of Slovakia against DP capping is expected to be maintained also in future, which could be explained by three main factors: the productivity argument, the political economy argument linked to the lobby pressure from large farms and low economic distortions caused by DPs.
{"title":"Why Cannot Direct Payments Be Capped in Slovakia? A Political Economy Perspective","authors":"J. Pokrivčák, Marián Tóth, P. Ciaian, Martin Busík, A. Svorenčík","doi":"10.18267/j.pep.753","DOIUrl":"https://doi.org/10.18267/j.pep.753","url":null,"abstract":"Annually the Common Agricultural Policy (CAP) provides support to the farming sector amounting to more than EUR 50 billion in the EU, of which direct payments (DPs) take around 70%. DPs are often argued to be granted unfairly to large farms. In this paper we analyse implications and the political economy of DP capping in Slovakia in the context of the ongoing negations about the future CAP reform. The simulation results for Slovakia show that if the 2018 Commission proposal was approved it would lead to losses of EUR 190.1 million (68% of total DPs) to large farms when labour costs are not subtracted. These losses would decrease to only EUR 12.2 million (4.4% of total DPs) when the labour costs are subtracted. Further, the results show that potentially affected large farms in Slovakia show lower performance and lower compliance with the agricultural policy objectives than farms unaffected by the DP capping. Similar to the past CAP reforms, the position of Slovakia against DP capping is expected to be maintained also in future, which could be explained by three main factors: the productivity argument, the political economy argument linked to the lobby pressure from large farms and low economic distortions caused by DPs.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":null,"pages":null},"PeriodicalIF":0.7,"publicationDate":"2020-11-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46790954","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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