Acta Univ. Agric. Silvic. Mendelianae Brun. 2011, 59(7), 477-488 | DOI: 10.11118/actaun201159070477

The Czech labour market after the crisis of a real economy: negative development or return to steady-state?

Pavel Tuleja, Michal Tvrdoň

Slezská univerzita, Obchodně podnikatelská fakulta, Katedra ekonomie, Univerzitní nám. 1934/3, 733 40 Karviná, Česká republika

This paper studies the Czech economy before, during and after the economic crisis. Consequences on the labour market, respectively on unemployment are also discussed in the paper. According to most economists the cause of the economic crisis was the financial crisis which was triggered by a liquidity shortfall in the United States banking system. It has resulted in the collapse of large financial institutions, the "bail out" of banks by national governments and downturns in stock markets around the world. Real gross domestic product decreased in almost all EU countries including the Czech economy. Massive drop of gross domestic product led to increase in the unemployment rate. The purpose of this paper is to contribute to discussion about consequences of this crisis. The paper provides also an analysis of gross domestic product and its components. The empirical analysis also tried to answer the question if it is more a return to steady-state than the deterioration of economic performance in the case of the Czech economy. In other words, it means that economic performance of the Czech economy was above the level of potential output. Research in this study is based on basic macroeconomic quarterly data between the years 2000 and 2010 which were published by the Czech Statistical Office and Eurostat. We found out that the Czech labour market had to cope with the consequences of the economic crisis and now it is going to reach a long-term equilibrium.

Keywords: gross value added, gross domestic product, potential output, unemployment rate, natural rate of unemployment, Beveridge curve

Received: May 30, 2011; Published: January 26, 2014  Show citation