Hana Bartušková

Bio: Hana Bartušková is an academic researcher. The author has contributed to research in topics: Monetary policy & Currency. The author has an hindex of 1, co-authored 1 publications receiving 6 citations.

Is Euro Area an Optimal Currency Area and What Barriers Could Obstruct Its Future Development

Abstract: European monetary integration has been a really ambitious project since the very beginning and during last decade it succeeded in many areas. The euro was launched without serious problems and since then the European Central Bank has managed to achieve a low inflation rate in the whole euro area. The European Union and the euro experienced the world economic crisis in 2008 and dealing with the impacts of this crisis was a real challenge for the EU, for all the member states, single monetary policy and the euro area and also for the whole integration process. In our paper we will proceed from the Optimal Currency Area model (OCA, developed by Robert A. Mundell, Peter Kenen and Ronald McKinnon) to conditions of the euro area and European currency integration process. The paper will summarize the OCA model and test the criteria for OCA in European conditions and identify barriers to the OCA as imperfect mobility of the labour market, an unfinished single market, insufficient coordination and cooperation in common macroeconomic areas within the euro area, asymmetric shocks and others. The findings will show us that euro area does not exactly meet majority of criteria for OCA model but due to strong political will of European states is the euro project going to continue. This paper also discuss the perspectives of European monetary integration.

Nominal and real wage flexibility in EMU

Abstract: Both common macroeconomic shocks and country-specific developments have subjected the flexibility of wage setting mechanisms in the euro area to a stress test in recent years. Against this background, this paper takes a fresh look at wage flexibility in EMU and attempts to draw a few lessons from the experience of the early years. First, we set the stage for the analysis by providing a brief description of the stylised facts regarding nominal and real wage and unit labour cost developments in the euro area over the recent business cycle. Then, the paper presents an empirical assessment of wage inertia based on new econometric estimates of a Phillips-curve type wage equation across euro area countries and offers an interpretation of the main findings with respect to nominal and real wage flexibility. Finally, we investigate the cyclical responsiveness of relative competitive positions among euro area countries. We conclude that from a bird's eye perspective euro area wage and labour cost dynamics have been quite benign in the past couple of years. However, our estimates suggest that persistent cross-country differences in wage and labour cost developments have not always reflected warranted adjustment needs; they are rather indicative of an eventually insufficient degree of nominal and real wage flexibility in the euro area.

An investigation of the effect of the European currency union (euro) on sectoral trade: an application of the gravity model of trade.

Abstract: The introduction of the single currency (Euro) in Europe has been referred to as the ˜worlds largest economic experiment and has led to major research on the effects of the adoption of a common currency on economic activity with considerable emphasis on its effect on trade flows at the macroeconomic level. However, the investigation of the euro effect on individual sectors has received very little attention and this provides the motivation for the research. The main contribution of this thesis is to the sectoral analysis of the single currencys effect on bi-lateral trade flows, specifically the effects on the transport equipment manufacturing sector. In order to achieve this, a comparison of the different estimation methods applied in the gravity model literature will be employed to investigate this effect and to identify the factors affecting trade in this sector. This study uses a panel data set which comprises the most recent information on bilateral trade for the EU15 countries from 1990 to 2008. This research aims to build on the results obtained in previous studies by employing a more refined empirical methodology and associated tests. The purpose of the tests is to ensure that the euros effect on trade is isolated from the other pro- trade policies of the European integration processes, particularly the introduction of the Single Market. The desirable feature of this approach is that, while other studies limit their attention to a particular issue (zero trade flow, time trend, sectoral analysis, cross-correlation, etc.), very few, if any, apply a selection of techniques. Overall, the results demonstrate that the single currencys effect on trade in this sector is limited with only the fixed effects formulation with year dummy variables showing a significant positive effect of the euro. An obvious policy implication for countries looking to adopt a single currency is that they should be cautious regarding the potential for growth in intra-bloc trade in a particular sector, although they will benefit from the on-going process of integration.

The Optimum Currency Area. Is the Euro Zone an Optimum Currency Area

Abstract: Although analyzed in terms of criteria for defining an optimum currency area, we could appreciate that EU fulfils certain criteria established within the theory of the optimum currency area But in comparison with USA or Canada, the EU has less premises to effectively become such an area The Economic and Monetary Union considered, from a certain point of view, the most ambitious and risky project of the European construction, is the result of a fundamental political decision within a powerful economic component Despite the statute of sub-optimum currency area, there are still a series of arguments, both supportive and critical, for the settlement of an Economic and Monetary Union within the European space

Eurozone non-optimality: An OCA based analysis

Abstract: This paper deals with the reconsideration of crucial Optimum Currency Area (OCA) criteria observing Eurozone (EZ) members in the period 2007-2018. According the aim to highlight key obstacles to EZ optimality, economies are mainly grouped into the core and peripheral countries of the initial 12 EZ members (EZ12), and subsequently joined 7 Emerging European Economies (EZ19). The research is based on descriptive analysis of openness and production diversification, macroeconomic divergences and heterogeneity of EZ members, labor mobility and wage flexibility, as well as political OCA criteria. While EZ was not initially constituted as an OCA, this research has confirmed persistent difficulties in EZ functioning in the (post) crisis period. Macroeconomic divergences between member states, insufficient labor mobility and wage flexibility, as well as the absence of political will towards creation of more efficient fiscal union, are identified as the main challenges of EZ sustainability.

Macroeconomic divergences and asymmetric responses within the euro zone

Abstract: The paper deals with the nominal and real divergences within the Euro-zone (EZ) as a background for asymmetric European Central Bank’s (ECB’s) monetary transmission. In order to shed more light into these issues, the descriptive analysis of key nominal and real indicators confirms the core-periphery dichotomy within original EZ12 members, as well as the specific position of the emerging EZ19 members. Monetary (interest rate) transmission is explored via estimated Vector Autoregression (VAR) model for the representatives of the core (Germany, France, Belgium), as well as the periphery (Portugal, Spain and Greece), in the period 1999Q1-2018Q4. Observing the transmission of ECB’s interest rate (the shock) to gross domestic product (GDP) growth (the response), the results of variance decompositions and impulse responses indicate that interest rate channel works countercyclical in general. However, while stabilizing (countercyclical) effect is evident for the core (especially Germany), it is almost absent in the case of Greece. The conclusions highlight the vulnerability of the EZ in the sense of heterogeneous membership and, accordingly, asymmetric response to ECB’s monetary impulse. Our findings support the arguments of numerous research papers in emphasizing core-periphery dualism, German dominance hypothesis, and “one size fits some” monetary policy.