E50 - Monetary Policy, Central Banking, and the Supply of Money and Credit: GeneralReturn

The present study focuses on the analysis of systemic risk in the American and European financial systems for the period from 20 August 2004 to 28 February 2014. The global crisis in 2007 has brought attention to the urgent need to understand the systemic risk issues and the stability of financial systems along with their actors. To assess systemic risk, Adrian and Brunnermeier (2011) advocated the use of conditional value-at-risk (CoVaR) methodology in integrating quantile regression. Instead of the value-at-risk (VaR), which is unable to detect systemic risk, we seek to use the CoVaR methodology to calculate the systemic risk levels of the United States and European markets. In the light of related findings, we conclude that the insurance sector contributes most to the systemic risk in the USA, while in the Eurozone, it is the financial services sector that is highly interconnected with systemic risk.

The paper examines the hysteresis hypothesis in unemployment in the case of eight selected countries in transition, using the Kalman filter and testing whether the NAIRU time series are stationary. The empirical results show that the hysteresis effect is confirmed for the majority of the countries. Testing the influence of the inflation growth rate on the decline in the NAIRU and vice versa, performed using the panel regression with fixed effect, confirmed that the increase in inflation leads to decline in the NAIRU. The conclusion also suggests the existence of the impact of actual unemployment rate on the NAIRU, which may be affected by the change in aggregate demand.

This paper tries to assess the conditions under which the CNB operates. Using a basic framework suggested by Mishkin (2000), the aim is to find out whether the central bank is able to conduct high-quality monetary policy. First, general principles that central banks should follow to succeed in their pursuit of monetary goals are theoretically introduced. Then, these theoretical principles are looked at in the Czech context. Issues of the strictness and suitability of concrete monetary policy of the CNB will not be dealt with, rather institutional circumstances that potentially allow successful policy are at the centre of this paper. It is concluded that the CNB is functioning in a moderately good environment, but still much room for improvement does exist.

After joining the EU in 2004, Slovenia and other new members will have to adopt the euro. Their accession to the European Monetary Union will require stabilizing and later fixing their exchange rates and thus restrictive monetary policy. The paper shows that successful stabilization of the exchange rate also requires restrictive fiscal policy. Fiscal policy that is not compatible with the goals of monetary policy would prevent stabilization of the exchange rate.