Electronic Library of Scientific Literature - © Academic Electronic Press
Volume 51 / No. 5 / 2003
Anna BRUCHÁČOVÁ – František HAJNOVIČ – Zora KOMÍNKOVÁ – Marián NEMEC
Monetary policy represents one of the key issues of the integration process of Slovakia into the Economic and Monetary Union (EMU). Within economic policies, it fulfills a stabilisation function and in the EMU accession process, monetary policy together with other policies are helping fulfilment of the Maastricht criteria by a targeted time limit for accession.
In the first section, the article deals with issues to be faced by the monetary policy in the process of accession. The questions discussed here include the selection of a monetary strategy, as well as possible procedures for disinflation and the issue of exchange rate policy, which will in time gain in importance. In this context, account is given of the circumstances of membership in the ERM II, whose purpose is to prepare conditions for introducing a common currency in accession countries. It is noted that the monetary policy operates within the context of a whole economic policy complex and it is exactly the coordination of its individual components that constitutes a prerequisite for building up credibility vis-à-vis markets and thereby a sustainable favourable economic development.
In the second section, we provide a summary of a range of issues, which will have to be solved as part of the process of accession to the EMU, and an indication of their size. The improvement of indicators decisive in terms of the entry is preconditioned by completing reforms with which certain costs will be associated. From this viewpoint, the most important is a reform of the public finance system associated with reforms in other areas, (particularly pension and health care system reforms), which have to do with the fulfilment of the budget criterion. The performance of the inflation criterion came under pressure, chiefly due to the postponement of price deregulations. These facts also influence conditions for meeting the debt and interest rate criteria.
A consistent strategy for the process of accessing the EMU will require a close coordination of actions taken by the government and the National Bank of Slovakia (NBS), especially when it comes to the harmonisation of monetary, fiscal, and other policies. A successful assertion of the strategy is preconditioned by a social consensus with regard to the reforms needed. This will require cooperation between the two entities and employers and trade unions, especially when it comes to the regulation of wage development. Last but not least, an efficient information campaign targeted at the population at large, will be required.
Globalization, capital flows, and growing fiscal and current account imbalances in a relatively large number of countries have motivated increasing research on these issues. The association of high external and internal deficits, which are generally referred to as twin deficits, has attracted increasing attention in the 1980s and the 1990s. Since the second half of the 1990s, this phenomenon has gained importance also in the transition economies of Central and Eastern Europe. For OECD countries, both current accounts and fiscal balances display a significant degree of hysteresis as shown by the unit root tests. Correspondingly, “twin deficits” are defined as a cointegrating relationship between the current account, the fiscal balance and investment.
This paper contributes to the discussion of current account, capital markets integration, and fiscal policy in the following ways. First, the paper analyzes the determinants of the long-run current account position in a broad set of countries including OECD countries as well as emerging economies between 1970 and 2001. Second, quarterly data are applied in this paper, while the earlier comparative studies are based on annual data. Thus, the issue of parameter stability and nonstationarity can be addressed here, an issue most authors of comparative studies, have omitted. By contrast, several country studies have focused strongly on the properties of analyzed time series.
Third, the paper considers both investment and the fiscal balance determinants of the current account in the long run, while the majority of the previous studies concentrated on only one of these factors. Various degrees of integration of the domestic economy to the international capital markets are found for the analyzed countries. In particular, the EU countries seem to finance a surprisingly high share of their domestic investment from international sources indicating that the so called Feldstein-Horioka puzzle (FHP) is less important in the EU.
Finally, the paper extends the analysis to the development of the current account and the fiscal balance in transition economies in the 1990s, while also presenting evidence for selected countries for comparison. With few exceptions, this group of countries has been omitted from the analysis so far.
The results show that twin deficits emerged in the 1980s. However, less evidence is documented for twin deficits in the 1990s. Furthermore, it is shown that the countries pursuing sustainable fiscal policies also display a high flexibility of the current account. As expected, investment contributed significantly to the current account deficit.
Despite the increasing role of international financial markets, several countries are still financing their investment mainly from domestic sources (savings). This feature confirms earlier results on the FHP. However, less evidence for the FHP is found for the EU countries and also for transition economies (Hungary, Poland and Slovakia). This result indicates that EU integration has significantly increased the degree of openness in the participating economies.
The transition economies are found to have high current account deficits, which are unique in a historic comparison, both in relation to developed countries and to emerging markets. By contrast, the transition economies’ fiscal indicators are more similar to those reported by other regions. As a result, twin deficits are found for Hungary and Poland, but not for Slovakia.
Possibly, the large current account deficits and fiscal expenditures may be viewed as an intertemporal phenomenon related to the output collapse at the beginning of transition. As a result, transition countries can make use of the possibility of financing current investment and consumption from future income, which is expected to converge rapidly in the course of accession to the EU. Indeed, the examples of Hungary, Poland, and Slovakia indicate that transition countries are comparably well integrated into the international capital markets.
The post-Keynesian approach to nature of money brings some other conclusion to the monetary policy, independence of a central bank and function of commercial banks. Loans create deposits, deposits create reserves.
Central bank plays two roles: lender of last resort and inflation supervisor. The money supply is a result of credit creation. The changes in money supply depend on changes in money demand but not on behaviour of monetary authorities. The ability of central bank to influence the economy by interest rate continually decreases as a result of develop-ment of financial innovation. Central bank has no control over the high-powered money. Central bank must resignate to adjust money supply. Money is endogenous by demand and pulled by credits.
Post-Keynesian theory is not homogenous, therefore it does not present recommen-dation for overall economic policy. The most interesting are recommendation in target at regulation of financial markets, supervision of central bank, fight with inflation and behaviour of commercial banks. Contemporary central banks partially implicate the post-Keynesian conclusion in monetary policies without their complete acceptance.
The aim of the paper is, on the basis of recent development analysis and significant changes in traditional information systems of enterprises, to emphasize and define the new position and tasks of management information systems as well as their importance in support of decision-making processes in the enterprises, creation of successful corporate strategies and assurance of high competitiveness of enterprises in the market. The paper is also trying to stress the main requirements of rapid implementation and effective application of efficient management information systems within our enterprises in the near future.
In Part 1 the author defines the concept of corporate information system and differentiates six main types of information systems within enterprises. He particularly studies the nature and significance of management information systems in the corporate management.
Part 2 provides a brief survey of the development and major changes in information systems of enterprises within the last decade. The information systems in enterprises have undergone rapid development in the above period and have changed considerably. Under the influence of more intensive utilization of the global Internet network the traditional information systems of enterprises of ERP type (Enterprise Resource Planning) have gradually expanded over the limits of enterprises.
Part 3 provides a more detailed analysis of the characteristic qualities and basic functions of Executive Information Systems that represent application possibilities of their effective utilization in the management of enterprises. In this chapter the author analyzes, in a specific way, the basic functions of Executive Information Systems: Access to Detailed Information (Drill down), Critical Success Factors, and Key Performance Indicators, Status Access, Trend Analysis and Ad hoc Analysis, and Exception Reporting.
In Part 4 the author studies the current status and main problems of EIS application by managers in Slovak enterprises. On the basis of analysis results he refers to the fact that managers in the enterprises do not apply adequately EIS in the area of corporate management in our country. The biggest problem appears to be insufficient information knowledge and training of top and other managers for application of these efficient information systems on the strategic and managerial levels of company management.
Part 5 stresses the new position and tasks of information systems, and particularly EIS in the corporate management. The new status follows mainly from wide application possibilities of these efficient information systems and new requirements to benefit the enterprises and firms. The development analysis of information systems of enterprises shows that the expectations of enterprises, from the view of corporate information systems, have greatly changed in recent years.
In the 1990s and at present, the information systems are expected to influence essentially the key processes of enterprise activities and their modifications and creation of new business opportunities. It is a question of the so-called innovation applications that may have indirect benefits rather difficult to calculate. The innovation value of information systems and information technology lies above all in the support of market expansion (e. g. by modelling, or predicting new requirements of customers) as well as in the creation of a competitive advantage e.g. by adding the product value via special Internet services. In connection with the above innovation applications and values the information systems, and EIS in particular, reach strategic significance as a factor creating the competitive advantage for enterprises and firms in Slovakia and abroad.
While within the last twenty years the idea had been applied that the information strategy of enterprises had to be connected with the global corporate strategy, at the present time it is quite evident that this relationship has been surpassed. Successful foreign companies insist on integration (not a link) between the general strategy of enterprises and information strategy in order to facilitate the implementation of new accessible opportunities for enterprises based on the application of high-quality information and knowledge provided by standard information systems, and EIS in particular, as well as modern information technology. Within EIS the new software tools are extensively used, as Data Warehouse (DW), On-Line Analytical Processing (OLAP), and the so-called Data Mining (DM). These new software tools facilitate the application of various ad hoc inquiries unspecified in advance which are formulated according to current needs, as viewed by managers and other users of enterprises. They represent a new, higher level of corporate analyses and provide the possibilities of achieving valuable information and knowledge for processing the corporate strategies of high quality. In this way the EIS may become a strategic factor assuring the high competitiveness of enterprises in the market, which is increasingly exposed to the new economic changes and pressures.
To build up, or to complete the building of information infrastructure appears to be another important requirement of rapid implementation and effective application of EIS which has not been met so far by our enterprises. Therefore, before EIS implementing, it is required to create the completed basic information infrastructure – a complex and reliable corporate information system of ERP type, including the SCM and CRM parts. The EIS requires reliable data from all areas of enterprise activity. Ultimately, it should be emphasized that the most important factor is related to the human resource – to managers. It is not sufficient only to gather information, but it is equally important to select the most important information, to interpret correctly the information acquired, and then to carry out necessary and efficient measures.
Soňa FERENČÍKOVÁ – Arnold SCHUH
Our study shows that regionalization is a commonly used and effective ma-nagement model for large multinational corporations (MNCs) in Central and Eastern Europe (CEE). From a strategic perspective the different environmental and market conditions in CEE require a certain degree of adaptation of global strategies for CEE to be successful. Cost savings from regional standardization and the pooling of resources are the main benefits resulting from regionaliza-tion. Regional headquarters (RHQs) are identified as adequate organizational model for the development and implementation of regional strategies. In the eyes of the regional management the advantages of RHQs outweigh by far certain drawbacks of this organizational model. A more comprehensive research design including all three involved parties – corporate, regional and local management – could be a next step to validate the findings of this explorative study.
We have investigated whether a society or a social or economic system can learn and adapt to the environment as a whole. Our investigation was based on the suggestion that people can learn and adapt to their environment. For that purpose, we have created two simple models which allowed us to see that cog-nitive processes originate through the evolution where, on one hand, less capab-le individuals are taken out and, on the other hand, capable individuals survive. We have experimented with and tested a simple economy based on the Cobb-Douglass production function. Our goal was to create a simple and understandable model of a complex system, not a sophisticated replication of the world. As we wanted to avoid the falsification of the experiment, we used as little of our preliminary knowledge as possible. Our aim was to achieve explicitly created evolution leading from the simple to the complex using minimum assumptions. Our experiment confirmed that the evolution was a spontaneous process that was changing the environment independently of one s mind and that the process of cognition can evolve in a such simple model.
Electronic Library of Scientific Literature - © Academic Electronic Press