The Macroeconomic Situation in the Czech Republic
CERGE-EI Working Paper Series No. 46
31 Pages Posted: 26 Feb 2010
Date Written: April 1, 1994
The paper analyses of some important features of the past and present macroeconomic situations in the Czech Republic. Between 1948 and 1989 the former Czechoslovakia lost its pre-war position among the advanced industrialized countries. The radical economic reform (prepared in 1990 and initiated on January 1, 1991) was successful from the point of view of macroeconomic stability (relatively low inflation, a stable exchange rate, a current account surplus and a nearly balanced state budget). However, it was accompanied by a sharp decline in real GDP which was deepened by the collapse of the CMEA. The split of the Czecho-Slovak Federation in 1993 also negatively affected the expected economic recovery. Nevertheless, according to international comparison the Czech Republic is now in the best macroeconomic position of all the postcommunist countries. Recent macroeconomic trends and short-terms forecasts are promising. Individual sections of the paper are documented with analytical tables containing the relevant statistical data and the author's own calculations. The specific models and methods used are described in the Appendix.
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