This thesis seeks to analyze the phenomenon of political business cycle (PBC) in the Czech Republic. It follows up the efforts of previous authors to determine the existence and subsequent character of the PBC in the country. Based upon the related works, it summarizes the current situation. However, unlike the previous analyses, this work concerns the monetary side of the economy. To be more precise, it examines the role of the Czech National Bank (CNB) within the process of political business cycle. It questions the level of independency of the CNB and poses a question whether the institution might actively participate in the creation of PBC. The following empirical analysis reveals that the CNB actively reduces the monetary base level in the economy within the pre-election period. It might signal its tendency to mitigate opportunistic behavior of the government.

L’objet de la présente thèse porte sur le rôle de la monnaie, en particulier bancaire, dans la détermination du niveau général d’activité chez le fondateur de la théorie quantitative contemporaine, Irving Fisher (1867–1947). Nous y montrons comment évolue sa conception des fluctuations et de l’instabilité en confrontant sa théorie des cycles de crédit (1911) à la déflation par la dette (1932, 1933). Notre objectif est de retracer la manière dont l’essor de la monnaie bancaire à partir de la fin du 19ème siècle, puis des marchés financiers dans l’entre-deux-guerres, sont intégrés dans la pensée de Fisher et, à travers lui, dans la conception libérale de la neutralité monétaire. Nous dégageons ainsi les structures logiques de ses deux analyses, en faisant valoir qu’elles s’appuient sur des mécanismes qualitativement différents, l’un bancaire, l’autre financier, mettant en jeu des variables et des processus de nature distincte. Cependant, une fois cette hétérogénéité mise en avant, il est possible de rapprocher les deux théories de Fisher en soulignant une invariance plus profonde portant sur le caractère déstabilisant de la monnaie. C’est pourquoi les deux grands projets de réformes qu’il défend au cours de sa vie, le dollar-compensé (1911, 1920) puis le 100% Monnaie (1935), sont construits en vue de répondre au même objectif : stabiliser la valeur de la monnaie. Le chapitre 1, introductif, présente les ressorts de la déflation par la dette afin d’en discuter l’articulation à la théorie des cycles de crédit au chapitre 2. Dans celui-ci, nous faisons apparaître que cette analyse de Fisher constitue un cas particulier d’un modèle plus général dans lequel, contrairement à ce qu’il pense alors, la stabilité de l’équilibre n’est pas garantie. Au chapitre 3, nous abordons les solutions qu’il propose pour lutter contre les désordres monétaires. Plus spécifiquement, nous précisons les liens entre sa perception de l’instabilité et les réformes qu’il suggère pour neutraliser l’influence de la monnaie sur les grandeurs économiques réelles. Dans le chapitre 4, nous poursuivons notre étude de la vision de l’instabilité de Fisher en examinant les fondements logiques et historiques de la notion « d’effet Fisher » au sens que lui donne James Tobin (1980). Enfin, le chapitre 5 traite de la réception et de la postérité des idées de Fisher en matière d’analyse de l’instabilité financière. Nous y montrons que la déflation par la dette n’est ni ignorée, ni totalement rejetée par les économistes dans les années 1930 et 1940, puis qu’elle occupe une place importante à partir des années 1970 dans la constitution des programmes de recherche néo-keynésien et post-keynésien. / The purpose of this thesis is to examine the role of money, especially of bank deposits,in Irving Fisher’s (1867–1947) analysis of the general level of activity determination, which constitutes nowadays the foundation of the contemporary quantitative theory.We show how his explanation of monetary instability evolves by comparing his credit cycle theory (1911) with the debt-deflation (1932, 1933). Our aim is to highlight the influence of the development of bank currency (from the end of the 19th century) and financial markets (during the interwar period) on Fisher’s economic thought, and through him, on the liberal conception of monetary neutrality. In this way, we draw the logical structures of its two analyses, by pointing out that they are based on qualitatively different mechanisms, one banking, and the other one financial, involving variables and processes of different nature. However, once this heterogeneousness advanced, it is possible to reconcile the two theories of Fisher by underlining a deeper invariance concerning the destabilizing character of money. That is why his two big reforms projects, the compensated-dollar (1911, 1920), and then the 100% Money (1935), are intended to answer at the same purpose: stabilize the value of money.Chapter 1 introduces the dynamic of the debt-deflation to discuss his relation with thecredit cycle theory in the chapter 2. In the latter, we assert that this analysis of Fisher is only a particular case of a more general model in which, contrary to what he thinks at the time, the stability of the equilibrium is not guaranteed. In the chapter 3, we discuss the solutions he proposed to solve the monetary disorders. More precisely, we specify the links between his perception of instability and the reforms he suggests to neutralize the influence of money on the real economic variables. In the chapter 4, we pursue our study of Fisher’s conception of instability by examining the logical and historical foundations of the notion of “Fisher effect” in the meaning given by James Tobin (1980). Finally, the chapter 5 deals with the reception and the posterity of Fisher’s ideas regarding financial instability. We show that the debt-deflation is neither ignored, nor totally rejected by the economists in the 1930s and 1940s, then that it occupies an important place from 1970s in the constitution of the neo-Keynesian and post-Keynesian research program.

This dissertation consists of three essays on firm-level frictions and their aggregate implications. The first two chapters show that inter-firm lending plays an important role in business cycle fluctuations. In Chapter I, I theoretically investigate the role of supplier credit relationships in propagating and amplifying small shocks using a stylized model of inter-firm trade and lending. I build a network model of the economy in which trade in intermediate goods is financed by supplier credit. In the model, a financial shock to one firm affects its ability to make payments to its suppliers. The credit linkages between firms then transmit financial shocks across firms, amplifying their effects on aggregate output. In Chapter II, I embed this mechanism into a more general macroeconomic framework to study empirically the role that inter-firm credit plays in the business cycle. To calibrate the model, I construct a proxy of inter-industry credit flows from firm- and industry-level data. I find that the credit network of the US accounts for 22 percent of the fall in GDP occurring from an aggregate financial shock. Finally, I use a structural factor approach to estimate the shocks which affected US industrial production (IP) industries from 1997-2013. I find that most aggregate volatility in IP was driven by aggregate liquidity shocks and idiosyncratic productivity shocks, and that the credit network of IP industries generated 17 percent of observed aggregate volatility. During the recent recession, three-quarters of the drop in aggregate IP was due to an aggregate financial shock. Chapter III presents a theoretical investigation of the long-run relationship between international trade and unemployment. I develop and analyze a static general equilibrium model with labor market frictions and heterogeneous firms in which firms can engage in cross-border hiring by employing labor domestically or from abroad. This chapter outlines the conditions on the model parameters under which unemployment rises or falls after trade liberalization, and demonstrates that models in the literature which ignore cross-border hiring likely underestimate the upward force of trade liberalization on unemployment.

By using Arellano and Bond GMM estimator, this paper analyzes how the regulation framework of Basel, affects the profitability level of the banking industry. The data consists of savings and commercial banks located in 16 different OECD countries over the time period from 1992 to 2009. The cross-country study, evaluates, whether increased capital requirements have a negative effect on bank profitability, meaning, if banks that keep a larger capital buffer earn a lower return or if banks that increase capital are better prepared for the financial crisis and therefore manage to get a better return. To evaluate the effect, the time period utilized is divided into a pre-crisis period (1992 to 2007), which is compared with an average over the total period (1992-2009). The measure of profitability is the return on equity and to control for business cycle fluctuations macro economic factors are included. Previous research results are scattered and indicate that decreased risk taking increases profitability, meanwhile increased regulation decreases profitability. The main findings in this paper are that Tier 1 capital and risk-weighted assets have a negative effect on profitability, whereas the capital buffer illustrates a positive effect.

In the models analyzed in this paper, there exists an incumbent politician with one objective, two choices, and voters who remember the past differently. The politician's primary goal is to get reelected, which is done by maximizing the number of votes on the day of election. The politician can increase their chances of reelection if they influence the state of the economy over time and ensure the economy is in its 'best' state on the days leading up to the election. In conducting this research, I wanted to study how different rates of memory decay influences the choices the politician makes during the course of their term. Also, I wanted to explore how long a politician would wait to have an election if that were a choice they could make. I found that voters who remember more of the past place a greater constraint on the incumbent leading to moderate fluctuations in the economy and frequent elections.

This dissertation examines the role of asset prices to act as a transmission and amplification mechanism. Specifically, it looks at how changes in asset prices can help transmit and amplify technology shocks through the credit channel by changing the supply of loanable funds, or changing the supply of deposits, or both. Using a modified version of the Kiyotaki-Moore credit cycles model with concave utility and decreasing returns to scale production function, the dissertation illustrates that asset prices can as a credible amplification and transmission mechanism. Using concave utility and decreasing returns to scale production function allows the incorporation risk aversion into the credit cycles model. The model can help explain the gap between observed magnitude of shocks, and the corresponding changes in economic activity. The behavior of a heterogeneous agent economy in response to a technology shock is simulated using computer programs. The simulations show that a one percent technology shock translates into a more than four percent change in capital held by the constrained agents by moving capital from one agent type to the other. This moves the economy away from a first-best equilibrium. If the technology shock is positive there is an increased demand of capital from the more productive agents, and thus a more than proportionate increase in output. If the technology shock is negative, the opposite path is followed, and economic activity falls more than proportionately. There are credit constraints built into the model. Agents' access to credit is determined by the value of collateral on oer, which in turn depends on asset prices. Technology shocks change demand for assets, their prices, their value as collateral, and hence agents' access to credit. Further, since prices are forward looking, a shock in one period propagates through time. These simulations show that the effects of the shock can be felt up to 13 periods after it has hit. An event analysis with housing price data from 18 countries spanning a period of more than four decades is also performed. It shows that there is strong co-movement of housing prices and economic activity. In particular, larger changes in housing prices have been accompanied by qualitatively similar changes in economic activity. The period leading up to the peak of a real estate cycle is accompanied by a more than proportionate increase in private sector lending, and once the peak has been crested, there is a more than proportionate fall in nominal private sector lending. This evidence is in sync with the earlier observation that changes in asset prices influence agents' access to credit and contribute to the persistence of the effects of the shock far into the future. Further, the preferred measure of economic health, the rate of inflation, sees no measurable change in periods leading up to a real estate peak, and beyond. This throws up the need for some other measure of economic health that is better able to capture the events in asset markets. Policy makers have been paying more attention to this channel in the aftermath of the sub-prime mortgage crisis in the United States. There have been multiples changes in regulatory policy across the world, and specific steps are being taken to dampen exuberance in the real estate market. Only time can tell if these measures turn out to be effective, but at least a step has been taken towards realizing that housing market can lead to a wider economic and banking crisis. / Economics

EMU as the only functioning single currency area has been criticised as a non-optimal currency area since the Treaty on European Union was signed. Despite this, it has been seen as, probably, the most complete economic project that has ever been conducted by any group of governments. Through Dynamic Factor model and Panel VAR method, we are focusing on the issues of business cycle synchronisation, effectiveness of ECB monetary policy and the euro fiscal dividend, thus to advances the current studies on EMU through assessing whether it can be a sustainable system. For example, whether economic fluctuations can be effectively managed by implementing a single ECB monetary policy and financial market can be relied upon as a monitoring and enforcing device to discipline fiscal behaviour of Eurozone countries. Overall, we concluded that EMU could be more sustainable if it was just formed by its core members, leaving the periphery outside the single currency area. However, since the EU has recently conducted many rescue measures to save the Eurozone, we are unlikely to see those troubled countries to quit EMU, at least, at the present time. The sustainability of the current EMU can be improved if more intra-trade can be promoted to enhance business cycle convergence; hence, it will be more likely to have a union-wide appropriate monetary policy. This will also reduce the requirement of depending upon using fiscal measures to compensate the loss of monetary sovereignty. Moreover, fiscal activities can also be better monitored/enforced since the financial market has begun to adequately adjust the long-term interest rates on Eurozone government bonds according to the development in those countries fiscal stance.

Higher education is often considered as one of the safest and most profitable investments in human capital. There are, however, signals that this sector has been experiencing unsustainable economic boom in the United States. This study examines the ability of Austrian Business Cycle Theory to explain the possibility of such boom, i.e. to explain the potential systematic errors in the allocation of human capital. We find that respective allocation is driven by the similar market forces as the allocation of physical capital and hence, that it may fall victim to the same, or similar false market signals, thus creating the cycle of boom and bust. Credit expansion in the sector of student loans can be the trigger then. Furthermore, we study the actual development in this sector and find that empirical evidence provides many reasons to believe that there has actually been unsustainable boom i.e. an economic bubble in the sector of post-secondary education in the United States.

[pt] Seguindo modelo desenvolvido por Prescott (2002), este estudo questiona qual seria hoje a renda per capita do brasileiro em idade ativa se o país adotasse os sistemas tributários de três países desenvolvidos: EUA, França e Inglaterra. Esta pesquisa mostrou que, no Brasil, a tributação sobre consumo é superior à francesa, enquanto que os impostos sobre renda são praticamente equivalentes aos cobrados nos EUA. E apresentou, para comparar, o total de horas trabalhadas por indivíduo em idade ativa de cada país. Por fim, apresentou o resultado de uma possível apli-cação deste modelo para o Brasil, concluindo que o PIB por pessoa em idade ativa seria superior ao atual com o sistema americano, inferior com o francês e pratica-mente equivalente com o britânico. / [en] Following the model developed by Prescott (2002), this study investigates what would be the income per capita for each working age Brazilian, assuming the country adopted the tax systems of three developed countries: USA, France and England. Our research shows that in Brazil consumption taxes are higher than in France, while income taxes are practically equivalent to those imposed in the USA. We show, for comparison purposes, the total hours worked per each working age individual within each country. Finally, we show the results of a possible application of this model for Brazil, concluding that the Brazilian GDP per each working age individual would be higher with the American tax system, lower with the French and equal with the British.

This paper compares the depth of the recent crisis and the Great Depression. We use a new data set to compare the drop in activity in the industrialized countries for seven activity indicators. This is done under the assumption that the recent crisis leveled off in mid-2009 for production and will do so for unemployment in 2010. Our data indicate that the recent crisis indeed had the potential to be another Great Depression, as shown by the speed and simultaneity of the decline in the first nine months. However, if we assume that a large second dip can be avoided, the drop in all indicators will have been smaller than during the Great Depression. This holds true specifically for GDP, employment and prices, and least for manufacturing output. The difference in the depth in the crises concurs with differences in policy reaction. This time monetary policy and fiscal policy were applied courageously, speedily and partly internationally coordinated. During the Great Depression for several years fiscal policy tried to stabilize budgets instead of aggregate demand, and either monetary policy was not applied or was rather ineffective insofar as deflation turned lower nominal interest rates into higher real rates. Only future research will be able to prove the exact impact of economic policy, but the current tentative conclusion is that economic policy prevented the recent crisis from developing into a second Great Depression. This is also a partial vindication for economists. The majority of them might not have been able to predict the crisis, but the science did learn its lesson from the Great Depression and was able to give decent policy advice to at least limit the depth of the recent crisis. (author's abstract)