Prague Economic Papers, 2020 (roč. 29), číslo 2

Foreign Trade as a Tool to Strengthen the EU's Competitiveness Against China (A Case of the Service Sector)

Peter Baláž, Michaela Královičová, Dušan Steinhauser

Prague Economic Papers 2020, 29(2):129-151 | DOI: 10.18267/j.pep.731  

The paper analyses some aspects of EU-China trade relations. Correlation analysis was applied to quantify the extent of the influence of the foreign trade with China on the overall foreign trade of the five members of the EU that have the largest foreign trade with China. Given the ongoing trade deficits of the EU with China, we decided to apply the Trade Complementarity Index (TCI) to determine the extent of their trade complementarity. Our initial hypothesis that the economies are highly complementary was rejected. We thus decided to apply the TCI to the EU's trade relations with the US. For the US, the TCI confirmed the existence of high trade complementarity....

Sectoral Price Stickiness and Inflation Persistence in Poland: A Two-Sector DSGE Approach

Agnieszka Leszczyńska-Paczesna

Prague Economic Papers 2020, 29(2):152-186 | DOI: 10.18267/j.pep.735  

This paper presents a theoretical model that is suitable for the analysis of price-setting hetero-geneity in a small open economy. The model is based on Benigno and López-Salido's (2006) work and is one of many examples of a dynamic stochastic general equilibrium (DSGE) model that utilizes heterogeneous price stickiness (e.g., Aoki, 2001; Bodenstein et al., 2008). The model allows analyses of a small open economy by extending the existing multisector models using the mechanisms described by Galí and Monacelli (2005). As a result, the model enables monetary policy analyses that take into account existing sectoral differences in the price-setting...

Relationship Between the Brent Oil Price and the US Dollar Exchange Rate

Radmila Krkošková

Prague Economic Papers 2020, 29(2):187-206 | DOI: 10.18267/j.pep.718  

This article deals with an analysis of the relationship between the Brent oil price and the US dollar price. This paper analyses the development of the intensity and direction of dependence between the nominal effective exchange rate of the US dollar and the price of Brent oil and other commodities, such as industrial metals, agricultural commodities, gold (including jewellery and platinum) in the period from January 1994 to April 2018. The next section tests the hypothesis that there is a short-term relationship between the effective US dollar exchange rate and the oil price. The last part of the article deals with the question whether there is a...

A Novel Strategy to Assess Motives Behind Private Transfers

Kevin Luo

Prague Economic Papers 2020, 29(2):207-225 | DOI: 10.18267/j.pep.730  

This study surveys the conventional methods and their limitations in assessing motives for private transfers. Based on the concept of "effective altruism" - a genuine altruist offers help instead of demanding, this study proposes a normative and discriminative strategy to help distinguish the transfer motives, focusing on whether income transfer persists over time. Its application to Chinese interfamily transfers reveals that altruistic motives do exist but play an insignificant role at the aggregate level.

The Impact of Fee Income Share on EU Banks' Performance and Its Implications for Drivers of Banks' Business Model Changes

Karolína Vozková

Prague Economic Papers 2020, 29(2):226-248 | DOI: 10.18267/j.pep.720  

This paper contributes to the current literature dealing with drivers of bank business model changes. We analyse the relationship between fee and commission income share and banks' performance in terms of profitability, risk and risk-adjusted profitability in the European Union. We applied the System Generalized Method of Moments to a unique data set of 329 EU banks in the period 2005-2014, which resulted in three key findings. First, we did not find any diversification benefits by increasing the fee income share. Therefore, we can conclude that the increase in fee income share observed in recent years in EU banks was driven mainly by external factors,...