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The goal of the article is to verify the credibility of time contingent Forward Guidance (FG) as well as its possible time-inconsistency based on the rarely addressed example of the National Bank of Poland (NBP). The NBP's FG constitutes a unique case study as this measure in its 'Odyssean' form was not introduced to overcome the limits of further policy rates cuts. It allowed us to verify the FG's credibility and time-inconsistency by applying OLS and GMM estimated contemporaneous and forward looking Taylor type rules with interest smoothing. Our empirical evidence reveals that the annual period of FG in Poland was perceived as a credible promise by consumers. We found that time-consistency could have been an additional factor enhancing the considerable credibility of FG. The satisfying results of the NBP's FG appear to be especially interesting, in particular, when contrasted with the often unfavourable experience with time-contingent FG of prominent central banks. We suppose that to achieve this, the central bank should act with caution and the NBP indeed did so by specifying carefully the short horizon of the commitment to be able to abandon FG when the circumstances change. We also discuss FG by opposing its advantages and the drawbacks indicated in the subject literature.

The aim of this paper is to question the scenario with legal tender law by an analysis of potential competition of alternative currencies. To accomplish such a goal, this study offers an original version of the dynamic macroeconomic model based on the money in the utility function. This model compares the current monetary conditions with the potential situation permitting more currencies circulating alongside. The main assumption about individuals' preferences over stable currencies underlines the whole paper with emphasis on the mathematical model. The outcome of the model reveals lower inflation rate in scenario with competition among currencies in comparison to the present scenario. This result by itself seems to favour the idea of an exclusion of legal tender clause and allowance of free currency competition. The final simulation of the model, using statistical software, brings to this so far "unambiguous" view scepticism due to possible difficulties during the discovery process.

The paper presents various GLM models using individual rating factors to calculate the solvency capital requirements for non-life underwriting risk in insurance. First, we consider the potential heterogeneity of claim frequency and the occurrence of large claims in the models. Second, we analyse how the distribution of frequency and severity varies depending on the modelling approach and examine how they are projected into SCR estimates according to the Solvency II Directive. In addition, we show that neglecting of large claims is as consequential as neglecting the heterogeneity of claim frequency. The claim frequency and severity are managed using generalized linear models, that is, negative-binomial and gamma regression. However, the different individual probabilities of large claims are represented by the binomial model and the large claim severity is managed using generalized Pareto distribution. The results are obtained and compared using the simulation of frequency-severity of an actual insurance portfolio.

In this paper, we conduct the simple comparative static analysis of the environmental and economic effects of the government and producer services sector's training of rural-urban migrants. We mainly focus our attention on environmental issues and reach the following conclusions: When the government lowers the interest rate of training loans, environmental conditions will worsen. However, when the producer services sector increases the unit cost of training rural labour, the opposite effect occurs, and environmental conditions will improve. In addition, we discuss the conditions under which a government reduction in the interest rate of training loans will lead to the reduction of pollution damage to agricultural production and a decrease in social utility.

The paper highlights the results of the survey of potential retail customers. The survey emphasizes the relationship between their responses to the chosen marketing pricing strategies and the perception of the introduction of the euro and the crisis. The multi-dimensional techniques were used to implement input data concerning perceptions of the euro introduction and the crisis in order to create a segmentation of respondents dividing them into: optimists, pessimists, crisispessimists, euro-pessimists, profiteers. It was subsequently proven that the responses of the members of these segments to the chosen pricing strategies EDLP (Every Day Low Pricing), Hi-Lo (High Low Pricing) and PMG (Price Matching Guarantees) differ significantly. Furthermore, the relation between the found segmentation and the subjective perception and assignment to the social group from the point of financial security is shown. Moreover, further segmentation of respondents according to their subjective anxiety about their future was carried out. Finally, the emphasis is put on the relation between the perception of the euro introduction in the country during the current influence of the world economic crisis on potential retail customers in the East Slovak Region and their subjective anxiety about their future.

Work incentives are closely related to production performance. This paper presents evidence that the value added of a firm increases when relative labour wage rises, or the level of unemployment increases. Both circumstances imply evidence in favour of the efficiency wage model. This theory is consistent with the views of many managers and personal administrators, who tend to ascribe primary importance to wage setting as an incentive to increase effort. We use a micro panel data set of Spanish manufacturing firms for the period 2004-2009 to simultaneously estimate a stochastic frontier of a firm's value added and the inefficiency determinants. The data source is published in the Spanish Industrial Survey on Business Strategies (Encuesta sobre Estrategias Empresariales, ESEE) collected by the Fundación SEPI.

This article aims to analyse the distributional impacts of the meal voucher system in the Czech Republic, especially concerning income inequality. It analyses the redistributive effects of meal allowances on various income deciles providing rough estimates of the impact of meal allowance tax exemption on the government budget and simulating several scenarios for the replacement of the current meal allowance scheme with flat meal allowances. We estimate that meal allowance tax relief represents a direct burden of around 11.3 billion Czech korunas for the state budget, although this approximation does not take indirect effects into account and could thus be an overestimate. We provide evidence which suggests that the current form of meal allowances widens the income gap between beneficiaries and non-beneficiaries, within as well as across the income deciles. Affluent households receive meal allowances more frequently, and, moreover, the allowances they receive are both nominally and proportionately higher. According to our simulation using a constant budget of the size of our rough estimate replacing the current meal allowance scheme with a flat meal allowance system would promote income equality. Such a change would benefit the lower deciles, due to a higher share of individuals in these deciles being entitled to meal allowances, while the upper decile households would see a decline in their meal allowances.

By increasing inventories, retailers attempt to raise service levels, and thus increase sale. However, in addition to a positive impact on product availability and sale, higher inventory levels may cause problems in performing in-store activities. As poor backroom-to-shelf replenishment process emerges as one of the most common causes of stock-out situations, this article compares store and on-shelf FMCG product availability at SKU level in different stores of a single retailer. In relation to this, besides direct, we have also investigated the indirect effect of inventory level on sale, by using store and shelf out-of-stocks as mediators. The results of the research showing much higher level of shelf- compared to store stock-out rate confirmed the existence of the problem in the realization of internal product flows within retail stores. However, despite the occurrence of this problem, besides direct positive effect of inventory level on sale, its indirect effect was positive as well. Therefore, these results were analysed in the context of other similar studies. In addition to empirical research, the article also discusses certain implications of more efficient organisation of in-store activities.

The study attempts to assess the effects of lifting short sale restrictions on the Warsaw Stock Exchange in terms of futures pricing efficiency. The approach implemented in the article involves evaluation and comparison of the mispricing series of the WIG20 index futures listed on the WSE, in a one-year time span before and after the regulatory change introduced in 2010. The results show that lifting short sale constraints has increased the efficiency of the Polish futures market. There was a decline both in the number of mispricing occurrences, and in the mean level and dispersion of deviations from the fair values, especially with regard to underpriced contracts series. The study reveals that, in contrast to the pre-event period, after the regulatory change the arbitrage opportunities were virtually absent for investors bearing the highest transaction costs.

This study investigates the exchange rate exposure of Turkish energy firms from 2002 to 2010. We employed a regression model that is constructed by adding exchange rate and oil price factors to Fama-French Three Factor Model. Empirical results suggest that exchange rate risk appears to impact energy firms diversely. Among the 9 energy firms in our sample, only 2 firms seem to be exposed to exchange rate risk. These two energy firms appear to have larger open foreign currency positions and do not use any hedging methods. On the contrary, rest of the energy firms that are not found to be affected by exchange rate risk either seem to have smaller open foreign currency positions or employ hedging methods to manage exchange rate risk. Overall, our results provide evidence that energy firms exposed to exchange rate risk share similar characteristics.

The study analyses expenditures of all municipalities of the Czech Republic over the period 2003-2013. It aims to examine whether changes in municipal spending get affected by the electoral cycle. The analysis has proven that expenditures of municipalities of the Czech Republic are influenced by the political cycle. However, the political business cycle has at the level of municipalities (compared to the macroeconomic level) its peculiarities. These arise mainly from limited options of municipal politicians to use economic instruments to win electoral votes in elections. To receive electoral votes, municipal politicians use mainly public investments and projects that are at the level of municipalities so apparent that they may influence voters in their electoral decision-making. Prior to elections, expenditures on investments significantly increase for all municipal size groups. For municipal size groups of over 50,000 residents, however, they are (per capita) higher compared to smaller municipal size groups. This may be explained by the fact that these municipalities have higher disposable resources (higher per capita own budgetary revenues, higher potential to acquire resources to co-finance municipal projects and broader portfolio of debt financing). Expenditures on transfers do not significantly change prior to municipal elections. We interpret this finding in a way that politicians prefer such investment projects that are ""visible"". Transfers are used to pay for certain current expenses for which municipalities may (in accordance with the established rules) apply through grants.

This paper relates to the initial public offering problem and companies' profitability levels before and after this event. In the presented study, profitability ratios in the year before initial public offering increase over the previous year, and then, after the IPO, fall. This confirms the phenomenon of distorting the level of profit before the IPO and partially equity dilution after the IPO.

The paper analyses the evolution of the retail network of the capital city of Slovakia Bratislava affecting buying behaviour and lifestyle of its consumers. From the marketing point of view, it characterizes the space behaviour of the consumers and presents the behaviour of consumers living in single districts of Bratislava. It shows, on the one hand, how the importance of consumer behaviour rises in the declining economic prosperity during last years, while on the other hand, the concentration in retail declines the chances for success of small independent food retail stores during last recent years. The authors used different methods, e.g. GIS, cluster analysis, for testing they asses the significance of market segments on the sample involving 11,389 respondents interviewed.

The effects of the financial crisis, that started in 2008 and first emerged on the American housing market, have been experienced by many European economies. The purpose of this article is to attempt to measure and assess the sensitivity of convergence processes to crisis in European Union's regional economies taking into consideration their sectoral structure. Particular resistance to crisis is associated with the presence of "modern" sectors of the economy. The study covers the panel of the European Union NUTS-2 level regions in the period 2005-2011. In the analysis, the application of panel data allows for inclusion of the specific non-measurable aspects characteristic for particular regions and time.

The aim of this paper is to examine the interaction patterns between equity and real estate returns in 8 emerging economies from Central and Southeastern Europe. For that purpose we apply the TAR model entailing two regimes and endogenously determined threshold, delay parameter, and lag length. The results suggest that in all the countries, the interaction between equity and real estate returns is subject to regime switching in at least one direction. Equity returns in general seem to be much more sensitive to real estate returns changes, while the reaction of real estate returns to changes in equity returns is not always present and it is much more subdued and delayed. In the majority of the countries, the value of the threshold is large and negative suggesting that equity returns (real estate returns) react differently to large negative changes of real estate returns (equity returns) when compared to changes of different magnitudes and alternative signs. Equity returns react more strongly to large negative changes of the real estate returns than to small negative or positive real estate returns changes, while the reaction of the real estate returns to the equity returns changes varies across countries, making neither regime more prevalent.

The purpose of this study is to determine the validity of the triplet deficit hypothesis, which means the savings gap and budget deficit effect on the current account deficit. The empirical model is estimated for the G7 countries during the period between 1994 and 2011. The findings show that budget deficit and savings gap have important role in current account deficit in terms of estimator results. Moreover, bi-directional causality between the current account deficit and the savings gap and between the budget deficit and the savings gap are determined. So, especially the savings gap has an important effect on the current account deficit and the budget deficit. That is, triplet deficit hypothesis is valid in G7. Moreover, traditional approach is also valid since the causality is found between the current account deficit and budget deficit. Thereby, the authors conclude that the choice of statistical tools in analysing the nature of relationship among the current account deficit, the budget deficit, and the savings gap may play a key role for policy makers.

The aim of this paper is to foster discussion on the issue of cooperation patterns typical for the supply side of the tourism market. Poland is used as a case study and an email survey was conducted in order to gather the relevant information from Polish tourist companies, mostly SMEs. The data obtained are analyzed using multivariate statistical techniques: factor analysis and logistic regression. Aside from cooperation between tourism firms, attention is also paid to relations between tourism firms and their partners in other sectors of the economy. The authors argue that there are certain characteristic groups of partners with which companies operating on the tourism market usually cooperate. The study also found that the size of a company affects its ability to cooperate with particular groups of partners.

We present and critically examine the links between the role of formal appraisal procedures, appraisal teams, and project champions and their influence in the selection of information communication technology projects in the Czech Republic and the UK. Our research is empirical and uses comparative analysis and exploratory descriptive analysis to interpret the findings. We draw on the economic, management and consensus-performance literature, and optimism bias theory to support our research. Our findings show significant differences in the practices between the Czech Republic and the UK, which we believe are the result of cultural and economic diversities. There is a high level of involvement of a project champion in the selection of projects with concern being expressed over their excessive/biased influence in the decision-making process. An important finding from our research reveals that adopting clearly defined appraisal/selection procedures may reduce this biased influence. As project failure can result from the influence of a project champion at the project selection stage, it is important to fill this perceived gap in the literature. The research is the only empirical study of its kind conducted simultaneously in the Czech Republic and the UK.

This article identifies structural changes in the Czech economy in the period from 1996 to 2012 using a DSGE model estimated using Bayesian methods. A structural change is understood as a statistically significant change in model parameter(s). Prior to the first quarter of 1999, there was a structural change that can be primarily attributed to shocks impacting only the domestic economy, and to the domestic monetary authority's increased preferences towards inflation and exchange rate growth. The elasticity of substitution between domestic and imported consumption goods also increased sharply in this period. As far as the recent economic recession is concerned, it was caused by a much more persistent worldwide technology shock. Habit formation dropped abruptly during the crisis as households tended not to smooth their consumption much anymore. Recursive impulse response analysis carried out on the model suggests that the propagation mechanisms in the model economy changed, implying that the identified structural changes were accompanied by a change in behaviour of the model economy.

This article analyses a model in which the national border is determined non-dictatorially by being based on citizens' preferences. Each country faces a trade-off in terms of social welfare when considering whether to increase its size. As a country's size increases, the government can collect more taxes and provide more public goods, which, all else equal, makes its citizens better off. On the other hand, a country that increases its size is assumed to also increase the heterogeneity of its citizens' preferences leading to increased mismatch between preferences and the public goods provided by government. Notwithstanding the benefit of greater quantities of public goods afforded by living in a larger country, greater dissatisfaction with the public goods provided by government (i.e. preference mismatch) makes some segments of the citizenry worse off. Contrary to Alesina and Spolaore (1997), we show that a symmetric national border may be unstable. We also examine whether voluntary declaration of nationality guarantees the social optimum. Despite economies of scale from unification, the model implies that, from a social welfare perspective, there may be either too few, or too many, countries. Unification leading to fewer countries can be social welfare enhancing if people's preferences in those states are quite similar; secessions leading to a greater number of smaller states can be social welfare enhancing if preferences are sufficiently heterogenous.

The paper investigates how results obtained with standard CGE models can be improved by incorporating the effects of R&D activity in a recursively-dynamic CGE model built for the economy of the Czech Republic. The main objective of the paper is to quantify the impact of R&D activity on the long-term economic growth of the Czech Republic within the recursively dynamic CGE framework. The effect of R&D investment is modelled via the accumulation of knowledge that is treated as a specific production factor. The main findings show that knowledge accumulation can contribute to higher economic growth, but the impact of the dynamisation in the CGE model is very low. However, in terms of structural changes in the economy, the omission of knowledge capitalization might underestimate the tertiary sector in the longer run. The paper also investigates the efficiency of R&D investment and concludes that in the longer run, investment in capital goods is more efficient in achieving higher economic growth. In the concluding chapter, related factors that may improve the impact of knowledge in the CGE model are discussed.

This paper discusses the electoral implications of psychological motivation on voting functions. We tested a claim of the Weber-Fechner law as applied to electoral behaviour - specifically, that an expanded public sector leads politicians to make more significant, opportunistic distortions of public expenditures than the distortions observed when the public sector is diminished. We employed a system of simultaneous equations to test this hypothesis for cases observed in more than sixty democracies since 1960. We gave a special focus to the cases of Central and Eastern European countries. Our results confirm the main implications of the Weber-Fechner law. Years in incumbency, running for re-election, higher unemployment and higher inflation rates tend to generate negative moods, feelings and affects in the electorate; thus, these factors tend to approximate the vote share of the most voted party to the remaining vote share of the challenger political forces.

The study is a contribution to the theoretical/empirical analysis of the problem of outsourcing of policy advice in the public administration. It provides the typologies of expenses for policy advice in the public administration and examines the relationship between internal and external expenses on an example of the ministries of the Czech Republic for the period from 2001 to 2011. It shows that extreme changes in the form of increases in expenses for outsourcing arise when an amendment to the Act on Public Contracts is prepared. We explain the problem on the basis of changes in the behaviour of the clients as a result of expected changes to the contracting conditions. The study shows that several factors influence the amount of expenses for the outsourcing of policy advice. The ""large"" ministries have relatively fewer expenses for the outsourcing of policy advice than ""small"" ministries. Ministries that have their own workplaces available in their structures (i.e. in the form of their own scientific research workplaces) have lower than average expenses for the outsourcing of policy advice. Ministries with higher average wages are ministries with a relatively large number of managers in relation to the number of analysts, and thus they implement a higher degree of external services (measured as a share of the wage expenses).

Current paper has focused on the capital structure management theories. The theoretical part of the study firstly highlights the differences between trade-off theories and pecking order theories. In the empirical part there are then proved some significant relationships between financial indicators (debt/equity ratio and return on equity) of homogenous data sample from the Czech branch of building area. The aim of the study is to prove the differences between the capital structure development that are based on the type of the Czech companies' ownership in the selected NACE industrial branch and to point out some other particularities. The contribution of the paper is a comparison of the theory as well as practice of this issue in the Czech Republic. For pooled sample there are used selected financial indicators of 57 building companies, all with turnover of more than CZK 1.5 billion. The choice of this criterion was a result of a change in efficiency in Czech economy observed in the selected period. We can assume that this factor will have low influence on the selection of financial resources of large corporations. We may even say that for large companies the availability of financial resources remain unchanged. We have obtained annual data from 2004 to 2011. Due to such short estimation period, but the width of pooled sample on the other hand, it is used generalized method of moments (GMM) panel regression. There are also arguments of motivation to analyse business branch of building specifically. Moreover, an analysis is split according to ownership of companies into two categories, for the Czech and foreign owners. Based on the recent literature there has been made and tested three hypotheses. Results of the article have clearly proved the separation of managers from owner's positions. On the top of that, domestic companies are not pushed to distribute the realized profit so much as foreign owners that prefer the return of their means invested into business. There is also a suggestion of future interests in research focused on other Czech business branches, too.

This paper provides an up-to-date analysis of the redistributive effects of the Czech tax and benefit system at the household level. We provide several measures of the extent in which the tax and benefit system redistributes from the rich to the poor and from the childless households to the households with children. We find a rather weak combined power of the tax and benefit systems in alleviating income inequalities. The system redistributes primarily towards households with children. While households with children earn 55 per cent of total earnings, they pay 39 per cent of total taxes and receive 68 per cent of total benefits. Even the richest households with children contribute a lower share of total net taxes (8 per cent) than their share in total earnings (10 per cent). About a quarter of households with children in the upper income deciles collect some benefits while only half of the poorest households without children do.

This study offers a scientific and methodical approach to identifying systemically important domestic banks based on the indicator-based measurement approach recommended by the Basel Committee on Banking Supervision. By improving both a set of criteria and indicators of a bank's systemic importance it is offered to distinguish its five levels - low, moderate, medium, significant and high. The approach was tested on 26 Ukrainian banks representing different groups (depending on the size of assets) according to the classification of the National Bank of Ukraine. We have discovered the absence of banks with high systemic importance in the period 2007-2011 - the majo-rity of banks are characterized by their moderate or low level. In our opinion, the best solution for systemic risk regulation would be the introduction of a differentiated regime of supervision over banks depending on their level of systemic importance and risk profile.

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 paper develops a theoretical framework for the analysis of transformation of the service sector during privatization process. A simple model which includes a supplier of services and retail firms is presented and applied to study the effects of various sequences of privatization. Our findings indicate that privatizing the supplier first is always at least as good as privatizing the retailers first because (unlike the strategy of privatizing the retail firms first) it increases both the number of retail firms and profit of the supplier.