Project Objective:
The project aims at answering the question, of whether, in a time horizon of several years, we can expect such long-term asset prices to approach their long-term equilibrium level.

Brief Summary:

For a long time the real long-term asset prices in Czechoslovakia and in the Czech Republic have not been developed in an environment which would, at least approximately, be similar to a market environment. After 1991, when a far-reaching deregulation took place, the prices started developing dynamically. The project aims at answering the question, if we can, in a time horizon of several years, expect such long-term asset prices to approach their long-term equilibrium level. This project will also deal with the questions, how these prices may respond to quantitative shocks (for example in the form of the sharp growth of money supply, demography changes, changes in taxation, national productivity growth, etc.), that occur in an economy from time to time, and which economic policy measures should be implemented to prevent excessive volatility of these prices, eventually to eliminate or cushion the consequences of this volatility.

The project is to result in mapping the development of long-term asset prices in the Czech economy and a variant forecast for the further development of these prices. The project is also to result in concrete recommendations for changes in macroeconomic regulation (indicators of asset price inflation are used abroad e.g. for decision-making on the rate of an expansive of monetary policy), banking sector regulation including institutional reforms, and also in recommendations for real estate market regulation, including land prices.

Outputs:
The results of the work will be presented at discussion seminars (4 seminars per year). These works will be published on the web pages of these seminars, in scientific journals and at the Working papers published at the University of Economics´ publishing.