This paper aims to analyze the cost factors that infl uence the export of the Czech Republic, and to estimate models suitable for quantitative analysis of export and its prediction. According to the macroeconomic theory, the fundamental export factors include foreign demand, domestic and foreign price level and exchange rate. Foreign demand refl ects the business cycle of foreign economy, price levels and exchange rate characterize the competitiveness of the exported goods, and the exchange rate determines, among others, the production costs through the prices of imported crucial inputs. Several models are applied to set of these variables, and their impact on the export dynamics of the Czech Republic is evaluated.

Ab stract:For eign di rect in vest ment (FDI) is an im por tant phe nom e non in in ter na tional eco nomic re la tions. Gen er ally, FDI is stud ied from the point of view of cap i tal and tech nol ogy trans fers to the re cip i ent coun tries while re spect ing a ba sic fact that profit is the main in ves tor's in ter est. In this pa per in Part 2, some rep re sen ta tive ex am ples of typ i cal FDI mod els are pre sented, whereas Part 3 should jus tify the spec i fi ca tion of a model which is for mu lated and ap plied in Part 4. In ves tors can be driven by the ex pec ta tion of max i mum profit which would be ob tained by al lo cat ing FDI ac cord ing to the ex change rate vol a til ity, i.e. af ter a sud den large de val u a tion of the host coun try cur rency large FDI in flows will fol low as fu ture ap pre ci a tion is ex pected. Large ex change rate shocks are de scribed with the help of skew ness. Neg a tive skew ness means that the appreciations oc cur more of ten. Rea son ing of the model ex plain ing FDI by mean, stan dard de vi a tion and skew ness of changes of ex change rate is pro vided. An ap pli ca tion to two New EU Members and two ASEAN countries is presented using panel data and seemingly unrelated regression technique.Keywords: for eign di rect in vest ment, ex change rate vol a til ity, panel data JEL Clas si fi ca tion: C23, F21 In tro duc tionFDI is a re sult of at tempts of firms to find prof it able pro duc tion fa cil i ties and mar kets. While weaker econ o mies are pri mar ily FDI re cip i ents, lead ing world econ o mies ex hibit not only FDI out flow but also strong tran sient FDI in flows. Tech nol ogy trans fer through FDI rep re sents one of the im por tant im pacts on the host coun try. The main in ter est of the in ves tor is represented by profit.A par tic u lar re la tion be tween FDI and eco nomic growth ex ists, though the di rec tion of cau sal ity may not be clear -as shown by Chowdhury and Mavrotas (2003). Other impor tant de ter mi nants of FDI usu ally are la bour cost, in come dif fer ence, pur chas ing power, ex port and exchange rate.

The econometric analysis of the quarterly time series allows for the conclusion that despite a considerable fall of GDP the development of the real consumption in CR was not profiled through a great shock. The influence of the past behaviour of consumers and the reactions arising from the adaptation to the existing transformation and market conditions caused some oscillation with a modest, and later with a considerable rise. The behaviour of the typical or average consumer did not lead to the consensus with the hypothesis of proportionality in the development of consumption and income. Also the hypothesis that consumption remains at the same level, when prices rise, was not accepted. From the parameters of equation the conclusion can be made that the consumers (in accordance with the principle of the monetary illusion) increased their expenditures.

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Abstract:Estimation of the costs of disinflation policy is usually done using the sacrifice ratio (SR) coefficient. This paper provides two alternative estimates of SR for the Czech economy. The estimates are based on relatively simple, but transparent and verified models, i.e. their vector autoregression and vector moving average representations. When we analysze our estimates of the Czech SR from the accuracy point of view, we see that the results are very sensitive to the way of definition of monetary shocks. Even though the individual estimates of the SR are generally not accurate enough for monetary policy decision making, there is a good probability that the Czech SR was negative during the transition period analysed, with relatively low absolute value. We may therefore assume that if the Czech National Bank decides to incur monetary restriction, such action would not have long-term significant negative impact on output.