Credit Cycles Theory and Application on the Czech Republic
|Author:||Mgr. Vilém Semerák|
|Year:||2001 - winter|
|Leaders:|| doc. Mgr. Tomáš Holub Ph.D.
|Work type:|| Economic Theory
|Awards and prizes:||M.A. with distinction from the Dean of the Faculty of Social Sciences for an excellent state-final examination performance and for an extraordinarily good masters diploma thesis|
|Abstract:||This paper examines relationships between credit markets and overall macroeconomic development. Several traditional and modern theories of credit cycles are analysed here from the point of view of their applicability on transition economies and especially on the Czech Republic with emphasis on theories that build on interaction between asset prices and credits. The author comes to conclusion that theories with more realistic approach (Minsky's financial instability) are more relevant for transition economies than models based on the Real Business Cycle environment (Kiyotaki and Moore).
It is shown that this kind of analysis, although theoretically relevant and challenging, is difficult to materialize because suitable data on fixed asset prices are not available. Several alternative indicators of development of prices collateral are therefore proposed.
As far as Czech Republic is concerned, aggregate level of credits did not change so dramatically as original official statistics suggested and the decrease in credits had also specific structural characteristics. These changes can be attributed to problems of the Czech banking sector, but primarily to financial weakness and low profitability of Czech business firms.
JEL Classification Numbers:
E51, E32, E31
|Downloadable:|| Diploma Thesis - Semerák