Czech dream of catching up with Germany: analyzing the process of convergence

This diploma thesis examines the process of Czech and German economic convergence. The first part describes the political and economic background of the development of both countries. Real convergence (GDP in purchasing power parity, labor market, unemployment, labor productivity, average and minimum wages, education system, health system, transport infrastructure, subsidy flows) is analyzed in the second part, as well as nominal convergence (price level, interest rates) between years 1995 and 2015 and where the data are available more broadly between years 1990 and 2016. In addition to the comparison of the development of the Czech Republic and Germany, the development of the former East and West Germany was also studied.This work finds that the convergence of both countries does not take place in all the studied areas and throughout all the period. The most problematic phase for the Czech Republic is the period between years 2010 and 2013, when convergence stopped, especially the real one. The poor situation is also in the area of Czech educational outcomes, the transport infrastructure and the level of Czech wages. Nominal convergence takes place without major problems.