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The Economic Balance of the Czech Republic and Slovakia During the Economic Crisis

Author

Listed:
  • Ilya Bolotov
  • Radek Čajka
  • Kateřina Gajdušková

Abstract

The paper examines development of economic balance and efficiency of monetary and fiscal policy in the Czech Republic and Slovakia during the crisis with the help of empirical verification of Robert Mundell's model of effective market classification. Our main findings show that although there was no direct 'loser' during the crisis, the Czech Republic seemed to have better coped with its economic imbalances due to the independence of its monetary policy. Slovakia, on the contrary, has preserved several problems on the side of external balance. However, as both countries show certain differences, it is impossible to assess whether the euro adoption had the same effect on both of them. In general, the paper contributes to the research on the Czech and Slovak economy and euro area membership.

Suggested Citation

  • Ilya Bolotov & Radek Čajka & Kateřina Gajdušková, 2013. "The Economic Balance of the Czech Republic and Slovakia During the Economic Crisis," Prague Economic Papers, Prague University of Economics and Business, vol. 2013(4), pages 504-523.
    • Handle: RePEc:prg:jnlpep:v:2013:y:2013:i:4:id:465:p:504-523
    DOI: 10.18267/j.pep.465
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    References listed on IDEAS

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    1. Ghosh Indradeep, 2007. "The Relation between Trade and FDI in Developing Countries -- A Panel Data Approach," Global Economy Journal, De Gruyter, vol. 7(3), pages 1-32, October.
    2. Virginie Coudert & Cyril Pouvelle, 2010. "Assessing the Sustainability of Credit Growth: The case of Central and Eastern European Countries," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 7(1), pages 87-120, June.
    3. Simon Guttmann & Anthony Richards, 2006. "Trade Openness: An Australian Perspective," Australian Economic Papers, Wiley Blackwell, vol. 45(3), pages 188-203, September.
    4. Robert A. Mundell, 1962. "The Appropriate Use of Monetary and Fiscal Policy for Internal and External Stability," IMF Staff Papers, Palgrave Macmillan, vol. 9(1), pages 70-79, March.
    5. Petr Kral, 2004. "Identification and Measurement of Relationships Concerning Inflow of FDI: The Case of the Czech Republic," Working Papers 2004/05, Czech National Bank.
    6. David Havrlant & Roman Hušek, 2011. "Models of Factors Driving the Czech Export," Prague Economic Papers, Prague University of Economics and Business, vol. 2011(3), pages 195-215.
    7. Josef Arlt, 1997. "Regresní analýza nestacionárních ekonomických časových řad [Regressive Analysis of Non-stationary Economic Time Series]," Politická ekonomie, Prague University of Economics and Business, vol. 1997(2), pages 281-290.
    8. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    9. Martin Mandel & Vladimír Tomšík, 2001. "Mix monetární a fiskální politiky v České republice: empirická verifikace modelu efektivní tržní klasifikace [Monetary and fiscal policy mix in the Czech Republic: empirical verification of the pri," Politická ekonomie, Prague University of Economics and Business, vol. 2001(2).
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    Cited by:

    1. Jan Čapek, 2016. "Structural Changes in the Czech Economy: A DSGE Model Approach," Prague Economic Papers, Prague University of Economics and Business, vol. 2016(1), pages 37-52.
    2. Gulbahar Atasever, 2021. "A Kaldorian Perspective on the Turkish Economy (1980–2020)," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 71(1), pages 59-80, June.

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    More about this item

    Keywords

    external balance; cointegration analysis; internal balance; economic crisis; effective market classification model; error correction model;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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