This paper investigates the transmission from interest rates to household saving behaviour when introducing two main innovations of analysing this relationship. The first one is based on the use of a set of client interest rates instead of one monetary policy rate. This step enables us to distinguish impacts of the substitution and income effects in more detail. The second major innovation lies in the division of households into income categories, which provides us with more observations and thus makes it possible to conduct this analysis even for a single country. Using the generalized method of moments for the dynamic panel data, we analyse Czech household behaviour for the period 2004-2015. The results highlight that when we ignore details of the transmission channel and use only a monetary policy rate, we lose crucial information about contradictory impacts of the substitution and income effects that are primarily reflected in the client interest rates. This fact may clarify most of the interest rate-savings rate puzzle.
{"title":"INTEREST RATES AND HOUSEHOLD SAVING BEHAVIOUR: AN EMPIRICAL PUZZLE AND A SOLUTION USING CZECH DATA","authors":"Ondřej Badura","doi":"10.18267/j.pep.741","DOIUrl":"https://doi.org/10.18267/j.pep.741","url":null,"abstract":"This paper investigates the transmission from interest rates to household saving behaviour when introducing two main innovations of analysing this relationship. The first one is based on the use of a set of client interest rates instead of one monetary policy rate. This step enables us to distinguish impacts of the substitution and income effects in more detail. The second major innovation lies in the division of households into income categories, which provides us with more observations and thus makes it possible to conduct this analysis even for a single country. Using the generalized method of moments for the dynamic panel data, we analyse Czech household behaviour for the period 2004-2015. The results highlight that when we ignore details of the transmission channel and use only a monetary policy rate, we lose crucial information about contradictory impacts of the substitution and income effects that are primarily reflected in the client interest rates. This fact may clarify most of the interest rate-savings rate puzzle.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":"27 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"2020-03-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138531099","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 paper analyses the unemployment hysteresis in the Czech Republic on data from 1999 to 2016. The hysteresis is modelled by allowing for the impact of cyclical unemployment on the non-accelerating inflation rate of unemployment. Models are estimated using the Bayesian approach and provide robust evidence in favour of the hysteresis. The estimates imply that in response to an increase in the cyclical unemployment of 1 percentage point, the non-accelerating inflation rate of unemployment increases by 0.18 percentage points.
{"title":"Unemployment Hysteresis in the Czech Republic","authors":"Jakub Bechný","doi":"10.18267/J.PEP.709","DOIUrl":"https://doi.org/10.18267/J.PEP.709","url":null,"abstract":"This paper analyses the unemployment hysteresis in the Czech Republic on data from 1999 to 2016. The hysteresis is modelled by allowing for the impact of cyclical unemployment on the non-accelerating inflation rate of unemployment. Models are estimated using the Bayesian approach and provide robust evidence in favour of the hysteresis. The estimates imply that in response to an increase in the cyclical unemployment of 1 percentage point, the non-accelerating inflation rate of unemployment increases by 0.18 percentage points.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43213264","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}
Debt literacy has been considered to be a critical competence of modern societies since the recent global financial crisis. Debt-literate individuals are less prone to financial abuse and perform better in terms of credit management. Currently, debt-related information and knowledge are widely accessible through social networking sites (SNS), such as Facebook. However, not all SNS users have equal access to debt-related resources, and, consequently, they reach different scores in debt literacy tests. This study examines relational factors (resources) behind the debt literacy of Facebook users (N = 1,055) in Poland by applying the Resource Generator tool built into the online questionnaire. This quantitative instrument helps to diagnose resources that are embedded and mobilised (social capital) from personal networks made up of kin, friends and acquaintances. We found that users with more social capital, that is, better access to resources, perform better in debt literacy tests. Moreover, weak ties (acquaintances) appear to be good sources of debt-related information and knowledge that have positive impact on debt literacy scores.
{"title":"Does Social Capital Influence Debt Literacy? The Case of Facebook Users in Poland","authors":"Kamil Filipek, A. Cwynar, W. Cwynar","doi":"10.18267/j.pep.721","DOIUrl":"https://doi.org/10.18267/j.pep.721","url":null,"abstract":"Debt literacy has been considered to be a critical competence of modern societies since the recent global financial crisis. Debt-literate individuals are less prone to financial abuse and perform better in terms of credit management. Currently, debt-related information and knowledge are widely accessible through social networking sites (SNS), such as Facebook. However, not all SNS users have equal access to debt-related resources, and, consequently, they reach different scores in debt literacy tests. This study examines relational factors (resources) behind the debt literacy of Facebook users (N = 1,055) in Poland by applying the Resource Generator tool built into the online questionnaire. This quantitative instrument helps to diagnose resources that are embedded and mobilised (social capital) from personal networks made up of kin, friends and acquaintances. We found that users with more social capital, that is, better access to resources, perform better in debt literacy tests. Moreover, weak ties (acquaintances) appear to be good sources of debt-related information and knowledge that have positive impact on debt literacy scores.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49177302","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}
Yong‐cong Yang, P. Nie, Zhao-hui Wang, Tan Zheng-xun
This paper establishes a two-stage Hotelling model to identify the implications of the upgrades of durable goods produced by a spatial monopoly. The major findings indicate that, due to the positive effects on profits of the upgrading of products, the monopoly has the motivation to launch upgraded versions with high quality instead of solely producing products with low quality. The monopoly, meanwhile, would not make a commitment to either the high-quality products or the low-quality ones. In addition, the price of the low-quality products decreases as upgraded ones appear on the market in a second stage, since no consumers would store the low-quality products for future consumption.
{"title":"Spatial Monopoly with Upgrades of Durable Goods","authors":"Yong‐cong Yang, P. Nie, Zhao-hui Wang, Tan Zheng-xun","doi":"10.18267/J.PEP.712","DOIUrl":"https://doi.org/10.18267/J.PEP.712","url":null,"abstract":"This paper establishes a two-stage Hotelling model to identify the implications of the upgrades of durable goods produced by a spatial monopoly. The major findings indicate that, due to the positive effects on profits of the upgrading of products, the monopoly has the motivation to launch upgraded versions with high quality instead of solely producing products with low quality. The monopoly, meanwhile, would not make a commitment to either the high-quality products or the low-quality ones. In addition, the price of the low-quality products decreases as upgraded ones appear on the market in a second stage, since no consumers would store the low-quality products for future consumption.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44607729","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 questions the importance of accounting for sectoral heterogeneity in a DSGE model for the Czech Republic. The benchmark DSGE model originally developed by the Czech Ministry of Finance benefits from features such as wage and price stickiness, habit formation in the utility function and capital adjustment costs. The Input-Output DSGE model extended hereby proves to provide more precise estimates for the evolution of aggregate variables and to supply a more detailed structure of the economy. The set of variables the dynamics of which significantly improve consists of inflation rate and nominal interest rate. The disaggregated model also fits data well in terms of sectoral production functions. Finally, the absence of industrial heterogeneity in the model is shown to lead to an underestimation of the impact of the technology shock on the Czech gross domestic product.
{"title":"Input-Output DSGE Model for the Czech Republic","authors":"Kateřina Gawthorpe","doi":"10.18267/j.pep.724","DOIUrl":"https://doi.org/10.18267/j.pep.724","url":null,"abstract":"This study questions the importance of accounting for sectoral heterogeneity in a DSGE model for the Czech Republic. The benchmark DSGE model originally developed by the Czech Ministry of Finance benefits from features such as wage and price stickiness, habit formation in the utility function and capital adjustment costs. The Input-Output DSGE model extended hereby proves to provide more precise estimates for the evolution of aggregate variables and to supply a more detailed structure of the economy. The set of variables the dynamics of which significantly improve consists of inflation rate and nominal interest rate. The disaggregated model also fits data well in terms of sectoral production functions. Finally, the absence of industrial heterogeneity in the model is shown to lead to an underestimation of the impact of the technology shock on the Czech gross domestic product.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49549333","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}
An essential part of the EU's growth strategy is support to its own international competitiveness. The reason is that the domestic industry is losing its former positions and is being pushed out of both domestic and international markets. Developments on the international steel market over the last year confirm that the market is likely to see significant changes as a result of protective measures. Most of them will jeopardise the international competitiveness of the European steel industry with negative impacts on its overall economic growth. The aim of this paper is to analyse the influence of energy prices and, based on an international comparison of production conditions, identify the comparative advantages of the EU in this segment. For this purpose, use will be made of the RCA indicator and other research methods. The authors formulate some statements concerning the future development of this sector and the conditions which need to be satisfied to boost its competitiveness.
{"title":"Energy Prices and their Impact on the Competitiveness of the EU Steel Industry","authors":"P. Baláž, J. Bayer","doi":"10.18267/J.PEP.715","DOIUrl":"https://doi.org/10.18267/J.PEP.715","url":null,"abstract":"An essential part of the EU's growth strategy is support to its own international competitiveness. The reason is that the domestic industry is losing its former positions and is being pushed out of both domestic and international markets. Developments on the international steel market over the last year confirm that the market is likely to see significant changes as a result of protective measures. Most of them will jeopardise the international competitiveness of the European steel industry with negative impacts on its overall economic growth. The aim of this paper is to analyse the influence of energy prices and, based on an international comparison of production conditions, identify the comparative advantages of the EU in this segment. For this purpose, use will be made of the RCA indicator and other research methods. The authors formulate some statements concerning the future development of this sector and the conditions which need to be satisfied to boost its competitiveness.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43888115","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 paper provides a general equilibrium theoretical model of alcohol taxation and empirically estimates this model. For this purpose, we use a model determined by both externality corrections and fiscal considerations as the tax increase is assumed to immediately change other governmental policies such as labour taxation or medical expenditures. The results of our analysis show that under the most of parametric scenarios the current Czech tax rate on beer and wine is below its optimal level and that the fiscal component has a significant impact on the optimal level of tax.
{"title":"A General Equilibrium Model of Optimal Alcohol Taxation in the Czech Republic","authors":"K. Janda, Zuzana Lajksnerová, J. Mikolášek","doi":"10.18267/J.PEP.706","DOIUrl":"https://doi.org/10.18267/J.PEP.706","url":null,"abstract":"This paper provides a general equilibrium theoretical model of alcohol taxation and empirically estimates this model. For this purpose, we use a model determined by both externality corrections and fiscal considerations as the tax increase is assumed to immediately change other governmental policies such as labour taxation or medical expenditures. The results of our analysis show that under the most of parametric scenarios the current Czech tax rate on beer and wine is below its optimal level and that the fiscal component has a significant impact on the optimal level of tax.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45799913","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 paper brings to the foreground an indicator rather less used in specialized studies - the implicit tax rate of consumption - as an effective tax rate of consumption. In an empirical analysis, we try to analyse the impact of the main determinants on the implicit tax rate of consumption. The analysis is based on the panel technique in order to show the impact of tax harmonization on consumer taxation at EU27, EU15 and NMS12 levels, testing three hypotheses: (1) the implicit tax rate of consumption is directly influenced by the economic growth rate; (2) the effects of harmonization are more pronounced in the new EU member states; (3) during an economic crisis, the budget deficit and public debt determine changes in the implicit tax rate.
{"title":"Impact of Harmonization on the Implicit Tax Rate of Consumption","authors":"A. Feher, B. Condea, D. Haranguș","doi":"10.18267/J.PEP.705","DOIUrl":"https://doi.org/10.18267/J.PEP.705","url":null,"abstract":"This paper brings to the foreground an indicator rather less used in specialized studies - the implicit tax rate of consumption - as an effective tax rate of consumption. In an empirical analysis, we try to analyse the impact of the main determinants on the implicit tax rate of consumption. The analysis is based on the panel technique in order to show the impact of tax harmonization on consumer taxation at EU27, EU15 and NMS12 levels, testing three hypotheses: (1) the implicit tax rate of consumption is directly influenced by the economic growth rate; (2) the effects of harmonization are more pronounced in the new EU member states; (3) during an economic crisis, the budget deficit and public debt determine changes in the implicit tax rate.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2019-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46036838","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 article consists in the analysis of the beta coefficient presented in different areas for three types of financial institutions: banks, investment banks and life insurance companies. In the final evaluation, we analyse whether the beta coefficient has a high tendency to reach number one and whether there is a relatively stabilized position of the beta coefficient different from one for a certain period and a certain financial institution on a certain market and whether it is possible to avoid a relatively complicated process of beta coefficient identification in income valuation. For that reason, the analysis of the five-year beta coefficient in the years 2000-2014 was performed for the USA, developed European, emerging European, developed Asian and emerging Asian regions. The analysis proved that the beta coefficient values are lower than the "magic one", meaning that using a beta coefficient equal to one is possible only in some specific cases. Also, stability of the beta coefficient with some permitted deviation was identified only for some financial institutions and for some markets, for example 0.6 for banks on the developed Asian market and 0.35 on the US market.
{"title":"Meaning and Problems of Identification of Beta Coefficient When Valuing Financial Institutions","authors":"M. Hrdý, Markéta Pláničková","doi":"10.18267/J.PEP.704","DOIUrl":"https://doi.org/10.18267/J.PEP.704","url":null,"abstract":"The aim of this article consists in the analysis of the beta coefficient presented in different areas for three types of financial institutions: banks, investment banks and life insurance companies. In the final evaluation, we analyse whether the beta coefficient has a high tendency to reach number one and whether there is a relatively stabilized position of the beta coefficient different from one for a certain period and a certain financial institution on a certain market and whether it is possible to avoid a relatively complicated process of beta coefficient identification in income valuation. For that reason, the analysis of the five-year beta coefficient in the years 2000-2014 was performed for the USA, developed European, emerging European, developed Asian and emerging Asian regions. The analysis proved that the beta coefficient values are lower than the \"magic one\", meaning that using a beta coefficient equal to one is possible only in some specific cases. Also, stability of the beta coefficient with some permitted deviation was identified only for some financial institutions and for some markets, for example 0.6 for banks on the developed Asian market and 0.35 on the US market.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2019-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46320788","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 paper explores the dependence of emerging European stock markets (Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Russia, Turkey and Ukraine) on global risk factors (changes in gold prices, US implied volatility index and oil prices) based on daily data from 6 January 2004 to 31 December 2013. We employ a quantile regression model to analyse how the global factors affect stock returns under different market circumstances, such as bearish (lower quantiles), normal (intermediate quantile) and bullish (higher quantiles) times. Empirical results reveal that the response of stock markets is heterogeneous; larger equity markets, such as Poland, Russia and Turkey, are highly sensitive to the global factors while Bulgaria is the least sensitive. Overall, the dependence on gold and oil prices is positive while the dependence on US stock market uncertainty is negative. Additionally, in most of the cases, the dependence intensifies during bear market conditions, in which stock prices fall.
{"title":"Global Risk Factors and Stock Returns during Bull and Bear Market Conditions: Evidence from Emerging Economies in Europe","authors":"Sercan Demiralay","doi":"10.18267/J.PEP.680","DOIUrl":"https://doi.org/10.18267/J.PEP.680","url":null,"abstract":"This paper explores the dependence of emerging European stock markets (Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Russia, Turkey and Ukraine) on global risk factors (changes in gold prices, US implied volatility index and oil prices) based on daily data from 6 January 2004 to 31 December 2013. We employ a quantile regression model to analyse how the global factors affect stock returns under different market circumstances, such as bearish (lower quantiles), normal (intermediate quantile) and bullish (higher quantiles) times. Empirical results reveal that the response of stock markets is heterogeneous; larger equity markets, such as Poland, Russia and Turkey, are highly sensitive to the global factors while Bulgaria is the least sensitive. Overall, the dependence on gold and oil prices is positive while the dependence on US stock market uncertainty is negative. Additionally, in most of the cases, the dependence intensifies during bear market conditions, in which stock prices fall.","PeriodicalId":45324,"journal":{"name":"Prague Economic Papers","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2019-09-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42416162","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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