E42 - Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment SystemsReturn

The trend of cryptocurrencies has stirred interest in the underlying technology that qualifies cryptocurrencies as a secure structure with speedy, timely and cheap transactions. The aforementioned technology, the blockchain, in brief terms is a decentralized ledger technology that attains an immutable characteristic through consensus and timestamp mechanics. The model also sets the stage for transparency in transactions, which renders the technology applicable to a myriad of scenarios that involve financial instruments. This research puts forth an argumentative approach to the applicability of blockchain technology and specifically studies the prospect of utilizing smart contracts. This approach probes the feasibility of introducing smart contracts to everyday financial transactions and settlements. An opposing perspective, by taking a devil's advocate standpoint, invokes the impractical or implausible aspects of implementing the blockchain in certain scenarios. Difficulty in auditing is a prominent example among those impracticalities. Research methodology is qualitative in nature and takes the form of exploratory research by examining existing literature on the topic.

The doctrine of beneficial effects of price level stabilization is an integral part of modern mainstream economics. In the 1920s and 1930s, Friedrich August von Hayek questioned this monetary policy regime, and stressed injection effects of the newly created money aimed at price level stabilization in the economy with expanding natural output. This paper compares the Hayekian theory with mainstream economics. A simple graphical apparatus is used to clarify major differences between the two theories. Standard textbook models are applied to show why the Hayekian approach favours secular deflation over price level stabilization which may lead to the boom-bust cycle. The next section presents New Keynesian arguments in favour of stable prices or even low inflation, and it shows why the Hayek recommendations may result in quasi-recession. The "Wicksellian" equation, which relates inflation gap to the real interest rate gap, is derived to reconcile the Hayek approach with the mainstream perspective. Finally, it is demonstrated that New Keynesian price rigidities might be of much lower importance when the decline in prices is caused by technological progress. A gradually falling price level is then identified as a natural response of the price system in the expanding economy.

The purpose of the paper is to analyse the current crisis of the eurozone. The irst part explains why the eurozone is not an optimum currency area. The second part points out that euro is an intensiier of the business cycle. The third part examines the Greek crisis. The fourth part explains the inner tensions in the eurozone. The ifth part asks whether euro is suitable for the countries of Central and East Europe. The sixth part examines the debt crisis within the eurozone.

This study empirically attempts to unveil the contradictive findings regarding the relationship between fiscal imbalances and inflation in the context of the latest theoretical indications. The empirical analysis covers the period of 1970 to 2009 and applies dynamic panel techniques in a pool of 52 countries that comprises 19 developed and 33 developing ones. This segmentation is applied to illustrate the groups' specific features and the implications of heterogeneity. The findings provide supportive evidence for developing countries. We also find a significant degree of heterogeneity between the groups and the statistical significance of the relationship between fiscal imbalances and inflation in the case of developed countries cannot be ratified.

The paper offers a preliminary analysis of possible spontaneous euroization in the Czech economy. After a brief general introduction of the issue of currency substitution it specifically discusses two things. First, the transmission channels of potential spontaneous euroization, through which the process could possibly complicate the implementation of domestic monetary policy. Second, it analyses the degree of euroization. Among the transmission channels, attention is paid to interest rate and exchange rate channels. The circumstances under which the transmission would be sub-optimal are discussed. Besides the impact on the monetary policy transmission, another risk of progressive spontaneous euroization is seen in the shift of the exchange rate risk from bigger to smaller enterprises in the economy. The available data do not allow a precise measurement of the degree of euroization. Nevertheless, both the ratio of euro-denominated over koruna-denominated deposits and the CNB's survey in 2003 suggest that euroization is not an obstacle for the Czech monetary policy at the moment.