Research
I work on research in both economics (economics of information, theory of financial crises, modelling interest rates) and political science (electorary processes with focus on European elections, democratic theory and theory of regime transitions). My google scholar site is here.
Economics
Work in progress
Negative Policy Rates and Negative Interbank Rates: The Forgotten Channel of Quantitative Easing
Does the relationship between policy rates and interbank interest rates change when policy rates go into negative territory? And how does this relationship depend on policy like Quantitative Easing (QE)? I answer these questions by developing novel structural model for interbank interest rates. The main feature of the model is presence of two different regimes governing the relationship between policy rates and interbank interest rates: Normal regime, under which the interbank interest rates reflect the main policy rate of the ECB; Excess liquidity regime, under which interbank rates reflect the deposit rate of the ECB. Which regime prevails depends on presence of excess reserves held at the ECB. Quantitative easing policy influences the interbank rates in two ways. First, presence of excess reserves depends (among other things) on whether the central bank is pursuing QE or similar policy. Second, the amount of excess reserves influences the spread between interbank interest rates and deposit rate. Since quantitative easing policy increases excess reserves, QE pushes interbank interest rates further towards deposit rate. Both channels suggest a role played by quantitative easing in establishment of negative interbank interest rates. I estimate that without QE program the interbank interest rates would become negative only at the end of 2015 and would be 6 to 13 basis points higher at the end of 2016, depending on the maturity of the interest rate.
Developing Forecasting Models Using SpecEval Add-in for Eviews
This document illustrates how Eviews user add-in SpecEval can be used for developing forecasting models. The add-in was developed as a tool for interactive and iterative model development process in which model developed uses information about forecasting performance of current model to propose improvements to it. Correspondingly, the illustration in made in terms of several applications which start from simple model specification and then proceed to refinement of the model based on information about forecasting performance gathered from the SpecEval add-in outputs. The applications are chosen to be diverse so that they illustrate different functionality of the SpecEval add-in.
Responding to Inattention of Others: Experimental Evidence (with Jelena Plazonja and Suren Vardanyan)
This paper presents experiment which studies non-strategic information transmission between two individuals, focusing on limitations in their attention. Participants play the following game. Sender gathers information about the state of the world, and communicates it to Receiver. Receiver processes the information from Sender and takes an action which influences them both equally. Both Sender and Receiver face noisy informational environment, and hence have to exert attention effort when collecting information. We are primarily interested whether subjects adjust their attention in reaction to inattentiveness of their partners. To answer this we let subjects play the attention game with succession of different partners and analyse how does our proxy measure for attention change as the attention costs of the partner change. We provide evidence that subjects do pay less attention when attention costs of their partner are higher, in line with the predictions of the theory. In addition we also show that subjects reflect on expected precision of information when taking actions in Bayesian fashion.
Appendix - Experimental instructions handout
Persuading the Inattentive (with Jelena Plazonja)
In a world where one person has a privilege to design informational environment of another person, often the former attempts to persuade the latter. We study a standard costly persuasion game with two players, Sender and Receiver, and introduce into this setup a constraint on Receiver's information processing. We provide graphical solution to such problem in line with existing literature. In terms of outcomes our main takeaway is that Receiver's inattention can in general have ambiguous e.ects: the equilibrium outcome can be more persuasion than what would be observed without Receiver's inattention and even feature higher Receiver's net utility; alternatively, persuasion can breakdown completely even if both players can agree that particular signal is better than no signal at all. In the .rst case attention costs play the role credible commitment to disregard uninformative signals, while in the second case they prevent Receiver to credibly commit not to disregard very informative signals. When preferences are aligned and su.ciently well-behaved the equilibrium communication strategy has a bottleneck-like nature, with amount of communication determined by the information acquiring and processing costs. Hence, Receiver's inattention can substantially limit Sender's attempts at persuasion even when they agree on desired action in each state of the world.
Political Science
Published work
Who Governs in the Council? Determinants of Ministerial Participation in Council Meetings (with Jan Kovar)
The Council of the EU is the primary institution through which ministers of member states can express their positions on Commission proposals and vote upon legislation. This article first examines the extent to which ministers actually attend Council meetings before moving toward investigating the determinants of ministerial participation in over a period covering almost thirteen years between May 2004 and December 2016. It aims to identify determinants of why ministers from the Visegrad countries participate at some meetings and are absent from others. Using an original data set containing information about 940 Council meetings as well as several country-specific characteristics, we show that, on average, at about four out of every six meetings, ministers are absent. The results of our regressions indicate a pattern in which holding the office of the EU’s rotating presidency, the number of b-points on the agenda, and the size of the government increase the likelihood of ministerial participation in meetings. In contrast, high levels of popular support for Eurosceptic parties and holding of national legislative elections decrease the probability of ministerial attendance. Moreover, meetings of Council formations related to policy areas with a low level of EU competence are significantly less likely to be attended by ministers.
Candidate quality across different orders of elections: the cases of the Czech Republic and Slovakia (with Jan Kovar)
Elections to the European Parliament fall within the category of second-order elections (SOEs). Because these types of elections do not lead to the formation of government, there is less at stake and, consequently, voters behave differently when casting votes. But do also political parties also behave as if there is less at stake as voters do? This article draws on an original dataset on the political experience of party candidates in the Czech Republic and Slovakia to explicitly link the SOE model to independent actions of political parties. The results show that political parties indeed nominate higher quality candidates to the first-order arena, where more is at stake. Moreover, parties in government in first-order arena react to domestic situation and nominate lower quality candidates to EP elections than parties in opposition.
Representation of Women in Second-order Elections: The Czech Republic and Slovakia Compared (with Jan Kovar)
Elections to the European Parliament (EP) fall within the category of second-order national elections. Given the fact that these types of elections do not lead to the formation of government there is less at stake and, as a result, voters behave differently when casting their ballots. But what about political parties: do they also perceive the less-at-stake character of second-order elections in a similar fashion as voters and hence behave differently as well? This article draws on available electoral data related to women’s representation in the Czech Republic and Slovakia to explicitly link the second-order election model to independent actions of political parties. The results show that women candidates have (1) more positions and better ranking on ballot lists (equality of opportunities) as well as (2) better chances of getting elected (equality of results) when running in SOEs. Political parties remain the primary gate-keepers to political office and increasing women’s political representation will depend on whether they have a strategic incentive to promote women and to improve their chances of being elected. In this sense, the EP is a key space for the promotion of women, given the second-order character of EP elections.
National or European? EP Election Campaign Themes in the News Media (with Jan Kovar)
According to the dominant framework, European Parliament (EP) elections are second-order elections, in essence national contests ‘by other means’. They are not about the personalities and parties at the European level, or the direction of the EU policy agenda; instead, they are fought over domestic rather than European issues and topics, and the political parties collude to keep the issue of Europe off the domestic agenda. This paper aims to analyse one aspect of the second-order election (SOE) model, namely the fact that national political issues and concerns dominate SOE campaigns. We focus on EP election campaigns as portrayed in the news media based on a premise that large proportion of election campaigns consists of media coverage. Based on a content and thematic analysis (N = 434), the article integrates the second-order election model with media behaviours. The results show that, indeed, national political themes and domestic geographic scope dominate the EP election campaign in the media. The findings and their implications are discussed in the light of relevant literature.
Towards the European (-ised) Public Sphere: The Case of EP Elections in the Czech Republic and Slovakia (with Jan Kovar)
European Parliament (EP) elections fall within the category of second-order elections: because these types of elections do not lead to the formation of government there is less at stake and, consequently, voters behave differently when casting ballot. However, since the behaviour of voters in elections cannot be perceived in isolation from the behaviours of political parties and media, the question then arises if media (and political parties) also perceive that there is less at stake and hence they behave differently. To this aim, this article analyses the news media coverage of the 2004 and 2009 EP elections in the Czech Republic and Slovakia (N = 5672) and, at the same time, integrates the second-order election theory with the behaviours of the media. Moreover, the article provides unique comparative evidence of news coverage of national parliamentary (N = 5435) and EP elections in both countries. The results indicate that media across the EU only marginally cover EP elections and particularly less than national first-order elections and that coverage of EP elections is dominated by domestic EU political actors. The findings are discussed in the light of existing literature on EP elections, the existence of Europeanised public spheres and EU’s legitimacy as well as democratic deficit.