Investing in the Czech Republic in relation to GDP (Gross Domestic Product)

The purpose of this thesis was to investigate the relation between investments and gross domestic product (GDP)in the Czech Republic. The theoretical part briefly described appropriate definitions, accessible macroeconomic data and methods used for analyzing the relation between investments and GDP. For testing there were used regression and correlation analyses. For international comparison were used beta convergence and Gini coefficient for sigma convergence. Empirical part of the thesis was aimed on finding dependance of investment ratio on time and relation between investments and gross value added for the entire Czech economy and for selected Czech industries in 1995-2011. For international comparison through beta and sigma convergence were used the EU-27 and the EU-5 data in 2003-2012. The results of the analyses indicated decreasing investment ratio and growing GDP at the same time. This proved a positive trend following the highly developed countries of the OECD and the EU. Also it was found that there is a strong positive correlation between growth of both indicators investments and GDP. The results of international comparison revealed that investment per inhabitant in each of the EU-27 countries converge to the European average, while beta convergence was not proved in the EU-5 countries. As to sigma convergence analysis, Gini coefficient confirmed decreasing difference among investments per inhabitant in both the EU-27 and the EU-5 countries.