E22 - Investment; Capital; Intangible Capital; CapacityReturn

This paper is a theoretical one and deals with the real interest rate channel of monetary policy and sensitivity of investment to real interest rate. In the first part, the mechanism of the real interest rate channel is analysed. The second part focuses on the neoclassical model of demand for capital, Fisher's theory of investment, Tobin's q and Keynes's investment theory. All these theories are discussed in the context of real interest rate, i.e., whether they consider that investment reacts inversely to changes of real interest rate. The third part of the paper targets application of theories to the framework of the real interest rate channel. The paper concludes that all the mentioned theories of investment imply that investment reacts inversely and permanently to changes of real interest rate and also that central banks may influence investment via all types of real interest rate, i.e., short and long or market and retail real interest rate.

The paper is devoted to an analysis of the impact of historical revisions of national accounts by the Czech Statistical Office (CZSO) between 2010 and 2011. The theoretical part of the paper points out the importance of revisions of national accounts, describes the different types of revisions and summarises existing results of the revisions. The empirical part is devoted to an evaluation of the impact of the revisions on individual indicators entering the estimation of total factor productivity. While the level of hours worked was revised downwards, the level of fixed capital was revised upwards. Although the extent of revisions in the different years was not the same and there were also revisions of estimates of annual changes in the estimates of parameters entering TFP, the revisions of estimates of annual changes in overall productivity were not very significant, approximately a tenth of a percentage point. A significant change occurred only in the estimate for 2009. This happened not due to revisions, but using newer estimates of annual accounts for that year.

Timor-Leste is currently the third newest member state of the United Nations, independent since 2002. It is also one of the poorest places on earth where life is extremely difficult: after prolonged fighting, physical infrastructure is virtually nonexistent, services such as health and education are of a low quality and not accessible in the mountainous interior, and a big part of the population lives in extreme poverty scraping just enough to survive. However, all this might change during the next decade(s). Timor-Leste not only has many problems but also a powerful tool for their solution: oil and gas reserves in the Timor Sea. Timor-Leste has had to fight just as hard for the rights to exploit its natural resources as it was fighting for its independence. Many pressing socio-economic problems are awaiting resolution but the country can use over $10 billion of oil revenue to address them. Institutions and instruments have been set up for efficient management of Timorese oil resources, but will the government really manage to spend the country's wealth wisely?

The paper deals with the possible impact of the 2008-2009 financial and economic crisis on the potential output in the Czech Republic. Given the general difficulty in sketching out all the consequences of the crisis itself, the article is primarily focused on the labour market, which is regarded as an important driving force in terms of potential output fall or its growth slowdown. First, principal reasons why the potential output could have been hit by the 2008-2009 crisis are discussed in detail. The paper then analyzes a number of transmission mechanisms through which potential output could be generally impacted by severe recessions. Further, the output gap of the Czech Republic is estimated and a potential output development is drawn up. Finally, an approximate impact of the crisis on the potential product through the labour market is demonstrated. The results show that the potential output in the Czech Republic has been partially and temporarily affected in volume. This is specifically due to an adverse long-term unemployment and, to a much lesser extent, employment behaviour, in both cases seemingly in relation to the recent crisis. Likewise, Okun's law has been found to be relatively weak in the case of the Czech economy, thus further supporting the "hysteresis explanation". However, such a drop in potential output will likely not persist in the long run, provided that appropriate economic policies - in particular aiming at re-integration of long-term unemployed/discouraged workers and an increase in the employment and participation rates - are implemented.

In this note, we consider in discrete time the Ramsey growth model without discounting under stochastic uncertainty modelled by Markov processes. To make the model computationally tractable we shall consider finite state approximations of the original model. Properties of policies maximizing mean value of the global utility of consumers over an infinite time horizon, along with algorithmic procedures finding optimal and suboptimal policies, are reported.