Macroeconomic impacts of the COVID-19 pandemic in the Czech Republic in the period of 2020-2021

Adéla Zubíková () and Pavel Smolák ()
Additional contact information
Adéla Zubíková: Faculty of Economics, Prague University of Economics and Business
Pavel Smolák: Faculty of Economics, Prague University of Economics and Business

International Journal of Economic Sciences, 2022, vol. 11, issue 1, 117-145

Abstract: This article provides a comprehensive summary of selected macroeconomic impacts of the COVID-19 pandemic in the Czech Republic, including an assessment of certain implemented fiscal and monetary policies, using data from 2019 (to compare the development of the economic situation during the COVID-19 pandemic with the period before the onset of the pandemic), 2020 and 2021 on a monthly or quarterly basis. Particular attention is paid to monetary policy effects, which, unlike fiscal policy, the Mundell-Fleming model considers effective in a small open economy with a freely floating exchange rate. The article also investigates the volume of fiscal measures taken to mitigate COVID-19 pandemic effects, the restrictive measures introduced to Czech households and firms as well as labour market developments during the period of 2019-2021, including quantification of the aggregate labour productivity index. The conclusions of the article are that, during the COVID-19 pandemic, macroeconomic indicators in the Czech Republic acted in accordance with the established partial hypotheses of the Mundell-Fleming model and in accordance with the hypothesis of the modified Phillips curve. Possible causes of the significant increase in inflation since September 2021 include 2020 nominal public and private sector salary growth, which showed faster growth than aggregate labour productivity, and the highly expansionary fiscal policy that characterized the 2021 pre-election period.

Keywords: macroeconomic policy; monetary policy; aggregate labor productivity; labour market data; public expenditure; Phillips Curve; crisis management; Czech Republic; COVID-19 pandemic; Mundell-Fleming model (search for similar items in EconPapers)
JEL-codes: E52 H50 J01 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://eurrec.org/RePec/aop/jijoes/0080ES.rdf117021
https://eurrec.org/RePec/aop/jijoes/0080ES.rdf117021?download=8

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aop:jijoes:v:11:y:2022:i:1:p:117-145

Access Statistics for this article

International Journal of Economic Sciences is currently edited by Jan Cadil

More articles in International Journal of Economic Sciences from European Research Center
Bibliographic data for series maintained by Jiri Rotschedl ().