E20 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data)Return

Michał Kalecki was an original Polish economist, who is ranked among unorthodox Marxists. He focused mainly on issues of macroeconomic dynamics. He created the dynamic theory of effective demand, in which he overtook the more familiar concept of J. M. Keynes. Kalecki influenced many diverse economists, including, e.g., the first generation of post-Keynesian economics.

The article deals with the ability of the GDP indicator to interpret and capture economic performance, social progress and sustainable economic growth. Given the fact that the construction of indicators such as GDP does not monitor the quality of population, environmental changes or changes in stocks of non-renewable natural resources, it is necessary to take this into account (GDP is primarily an aggregate of production) and look for indicators that would allow a more complex analysis of not only economic performance, but also its social and environmental aspects. Some proposals for how to assess the sustainability of economic growth are summed up in the second part of the paper. This part of the paper is also devoted to the description of the Index of Economic Well-Being (Sharpe, Osberg). This section deals with the possibilities of measurement of households' living standards and it also describes the Index of Economic Welfare (Sharpe, Osberg). This index takes account of other aspects of households' quality of life (social inequality, social risks, etc.). The substance of a controversial problem called "phantom GDP" (imaginary GDP) is introduced in the last section of the paper. This effect has been described by some authors in connection with possible impacts of globalization on economic performance. The effect of "phantom GDP" is associated with a potential impact of outsourcing and offshoring on economic performance of home countries of multinational companies.

The aim of the paper is to analyze the transfer of financial flows of subsidies and taxes between the state and the beneficiary. In this respect, the topic deals with the return cash flow from the recipient to the state budget, the impact of taxes and VAT rates. The result is a compilation of mathematic models that allow quantification of the positive cash flow from the point of view of the funded entities and reflection-induced flows resulting from tax collection back to the state budget. Specifically, financial flows between the state and a sample of business entities in agriculture, which is a sector with significant endowments, were calculated as an example. The amount of reverse flow to the providers of financial subsidies (so-called hidden subsidies) was derived from the investment and operating subsidies in the model. An individual tax multiplier for differences in VAT rates was calculated as well.

The minimum wage has been a controversial issue since 1912, when Massachusetts (USA) passed the first state minimum wage act. The Czech Republic has had a statutory national minimum wage since 1990 (Act no. 65/1965 Coll., or the Labour Code; the specific minimum wage levels and the conditions for applying it were then set by a Government Resolution in 1991). The paper deals with some results of empirical research into the effects of the minimum wage on enterprises and employment and compares the statutory minimum wage in the Czech Republic and selected countries.

As regards the frequently mentioned risks connected with the EU entry, we feel that the analyzed macroeconomic data do not confirm that these risks have materialized. The example of the Czech Republic, which joined the EU in 2004, conversely points to an improvement of most macroeconomic indicators following the EU accession, and in fewer cases maintenance of the results from time before the membership. After the EU entry the inflation rate is kept on a low level, real GDP accelerated, economic level of the Czech Republic is increasing towards the EU average, the foreign trade records very positive results, the unemployment rate did not increase, real wages grow, exchange rate of the Czech crown against the euro and USD keeps strong positions, based on the Convergence Program, general government deficit of the Czech Republic has started to reduce after EU accession. As follows from the statistical data, period of intensive preparation of the Czech Republic to join the EU as well as first months of EU membership have rather a positive influence on the competitiveness of the Czech Republic.