Česká republika a kritéria optimální měnové oblasti

The goal of this bachelor thesis is to use the theory of optimum currency area to assess whether the Czech Republic is prepared to enter the Eurozone. Comparing the costs and benefits of monetary integration, this theory establishes economic and political criteria that should be met by the participating countries in order to assure that giving up the possibility to devaluate currency is still beneficial. In terms of labor mobility, the Czech Republic is far behind the Eurozone's average, but the future prospects remain positive. The degree of production diversification does not speak in favour of an early adoption of the euro either. Czech industry is too dependent on the machinery sector, which translates into a significant risk of asymmetric shocks. On the other hand, the Czech Republic performs better than most euro countries with regard to the degree of economic openness. Strong business links with Germany reduce the effectiveness of currency devaluation, making the Czech Republic a good candidate to enter the EMU. For such ambiguous cases, the theory recommends creating a system of fiscal transfers, which would allow countries to compensate for the negative effects of economic shocks. Consequently, the best approach for the Czech Republic seems to be achieving stronger real convergence and deeper political integration.