Work detail

Entry of the Czech Republic to the Eurozone: Price level convergence

Author: Bc. Jakub Mrhal
Year: 2009 - summer
Leaders: prof. Ing. Oldřich Dědek CSc.
Consultants:
Work type: Bachelors
Language: Czech
Pages: 58
Awards and prizes:
Link:
Abstract: The bachelor thesis called „Entry of the Czech Republic to the Eurozone: Price level convergence“ deals with real and nominal convergence, its mutual relation and the convergence influence on the inflation impact in the Czech Republic during monetary union integration. Using regression analyze we prove validity of the real beta convergence. We monitor the status of the Czech republic among other Central and Eastern Europe states in Maastricht convergence criteria performance. We test relation between nominal and real convergence, based on regression analyze we confirm existence Balassa-Samuelson effect and we found significant negative residual in case of the Czech Republic. That means lower comparative price level than it would correspond to the model GDP per capita value. At the end we model and quantify inflation costs for different convergence scenarios with different Eurozone entry date.

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