The Effect of Oil Price Shocks on the Czech Economy

In the course of 2002 up to the end of 2007, very steep growth of oil prices, but no remarkable slowdown of either the world economy or the Czech economy, was observed. This phenomenon raises a question about the impact of oil prices on modern economies. Analyzing the available data we can conclude that notwithstanding the full dependence of the Czech economy on oil imports, its overall dependence on imported energy sources is relatively low. Compared to the EU15 level the energy intensity of the Czech economy is quite high. Nevertheless, further improvements in this area are expected. Furthermore, the appreciation of CZK and the set-up of the tax system significantly reduced the volatility of the consumer oil price between 2002 and 2007. Using a structural CGE model we quantify the impact of oil price changes on the Czech economy and demonstrate that it is not dramatic despite the oil price turmoil in the years 2000 to the end of 2007. We find that a 20% increase in the CZK oil price tends to decrease the GDP level by 1:5% and 0:8% in the short and long run, respectively. Short-run annual GDP growth decreases by 0:3 p.p. Concerning prices, inflation would accelerate by around 0:4 p.p. per annum in the short run.CGE, Czech Republic, oil price.

Capital Controls and Foreign Investor Subsidies Implicit in South Africa's Dual Exchange Rate System

Both in theory and practice, capital controls and dual exchange rate systems can be part of a country's optimal tax policy. We first show how a dual exchange rate system can be interpreted as a tax (or subsidy) on international capital income. We show that a dual exchange rate system, with separate commercial and financial exchange rates, drives a wedge between the domestic and foreign returns on comparable assets. As a borrower, the government itself is a direct beneficiary. Secondly, based on data from South Africa, we present empirical evidence of this revenue implicit in a dual exchange rate system; a revenue that amounted to as much as 0.1 percent of GDP for the South African government. However, this paper also shows that both the capital controls and the dual exchange rate system in South Africa gave rise to many perverse unanticipated e¤ects. The latter may render capital controls and dual exchange rate systems unattractive in the end and, thereby, provides a rationale for the recent trend in exchange rate liberalization and unification.Dual exchange rate systems;capital controls;emerging markets;financial repression;optimal tax policy

Islet Xenotransplantation: toward a cure for diabetes

The pancreas is an organ with a central anatomical position in the abdomen, and a central role in the processes of food digestion and glucose metabolism. The vast majorit