Analysis of economic synchronization and structural convergence of the Czech Republic to the euro area

The diploma thesis deals with the economic synchronization and structural similarity of the Czech Republic with the euro area countries, or selected EU countries. The analysis is based on the theory of optimal currency areas, which defines a number of criteria, based on which it is possible to assess the suitability of adopting the European currency. The introduction is devoted to the theoretical basis of the optimal currency area. The individual criteria, their advantages or, conversely, their limited explanatory power are specified. The defined criteria are further used for empirical analysis. It showed good synchronization of the Czech Republic's economic cycles with most euro area and EU countries. The high involvement of the Czech Republic in international trade, which is largely with EU countries, is also perceived positively. The supporting argument is also the significant share of so-called intra-industry trade in total trade. The problem of the Czech economy may be a relatively different structure of the economy strongly focused on industrial production. At the same time, the original assumption of internal mobility and external immobility of production factors is violated, when the Czech Republic has strong ties with third countries, especially in the case of the labour market. Also, the structure of capital flows cannot be assessed positively. The vast majority of incoming capital is made up of less stable debt portfolio investments.