School specific course 5

TRANSFORMATION  OF  THE  CZECH  ECONOMY

COURSE COORDINATOR

Vojtěch Spěváček, Professor in the Department of Economic Policy

COURSE OBJECTIVE

The objective of the course is to deepen the students´ understanding of the political, economic 
and social aspects of the transformation process in the Czech Republic in the course of its 
transition from a centrally planned to a market economy.

KNOWLEDGE AND SKILLS AFTER COMPLETING THE COURSE

This course will clarify the ways in which a centrally planned economy operated, what its 
systemic failures were and why it was necessary to change the political and economic systems 
in the countries of Central and Eastern Europe. The course will be focused on the difficult 
process of transformation, based as it is on political and economic liberalization, 
macroeconomic stabilization and privatization. The students will be able to understand 
structural reforms, economic policies and economic development in former Czechoslovakia 
and the Czech Republic in the 1990s.

COURSE AVAILABILITY AND REQUIRED KNOWLEDGE

The course is available to CEMS students and registered Czech students. Students are 
expected to have background knowledge of macroeconomics, economic policy and 
macroeconomic analysis.

COURSE FORMAT AND TEACHING METHOD

The course will be taught in two class hours per week throughout the semester and will 
consist of lectures.

COURSE ASSESSMENT

Course assessment is based on a written test with five questions and a short oral examination.

COURSE CONTENT

Historical background, particularly as concerns post-war economic and political 
developments in former Czechoslovakia. The system of the centrally planned economy and 
macroeconomic developments in the period prior to 1989.

Economic conditions at the start of transition to a market economy and comparison of these 
economic conditions with other countries of Central and Eastern Europe.

The strategy of transformation of the Czech economy and proposed alternative scenarios of 
economic reform.

Systemic and institutional changes which characterized the process of transformation (price 
liberalization, liberalization of foreign trade and introduction of internal convertibility of 
currency, privatization, the development of financial markets, tax reform and the reform of 
the social security system).

Dissolution of the Czech and Slovak Federal Republic and the consequences of separation of 
the two republics.

Economic policy in the period of transition to a market economy - basic approaches, priorities 
and the main tools.

Macroeconomic developments of the Czech Republic and comparison of these developments 
with selected countries of Central Europe (output and demand, internal balance, foreign trade 
and external balance, labor market).

READING LIST

OECD Economic Surveys: The Czech and Slovak Republics, OECD Paris 1991 and 1994.

OECD Economic Surveys: The Czech Republic, OECD Paris 1996.

Economic Surveys of Europe, United Nations, Economic Commission for Europe, New York 
and Geneva, various issues.

Prague Economic Papers.

A.Holub: Economic Transformation in the Czech Republic: General Outline and Selected  
Problems , VŠE 1996, ISBN 80-7079-200-0