BOOK REVIEW
Vojtěch Spěváček: Macroeconomic analysis1
Helena Horská2
The recent turbulent economic development has renewed the interest of economists,
journalists, government officials and other professionals in economic figures and
indicators. Many of these professionals have been trying to find an explanation of the
last financial crisis in economic data, asking themselves whether they had not missed
the warning signals. The international institutions, including the European Union, have
joined the trend. As a result, the demand for deeper analysis of economic development
and its consequences has increased. The book named “Macroeconomic Analysis” (in
Czech “Makroekonomická analýza”) written by Vojtech Spevacek, Marek Rojicek,
Ruzena Vintrova, Eva Zamrazilova and Vaclav Zdarek answers the call for a more
professional (macro)economic analysis. This book written in Czech was published by
the Czech publisher Linde Praha, a.s. at the end of 2012.
The authors are either excellent theoreticians (Prof. Ing. Vojtech Spevacek, Dr.Sc.) and
academics with international experience (Ing. et Ing. Vaclav Zdarek MSc.), or wellknown
economists (Ing. Eva Zamrazilova, CSc. – the member of the Czech National
Bank’s Board, and Ing. Ruzena Vintrova, DrSc.,) and professional statistician –
economists (Ing. Marek Rojíček, Ph.D.). Although Vaclav Zdarek is “signed” under a
substantial part of the book, the list of authors is well-balanced even from the gender
perspective (3 men and 2 women). All of them participate in academic research and
cooperate with universities (some of them have even been doing so for a couple of
decades). Their knowledge is deep and wide.
The macroeconomic analysis is a study of economic development and economic policy.
According to the authors, the macroeconomic analysis is a synthesis of economic
theory, statistics and theory of economic policy. “The theory encounters the facts”.3
The
macroeconomic analysis helps investigate general economic trends or specific economic
changes and allows formulating and judging economic policy through explicit tools.
The book presents the methodology of macroeconomic analysis based on the System of
National Accounts, and tools for searching and processing economic data. Theoretical
principles of the macroeconomic analysis are frequently supplemented with examples of
relevant empirical materials. The wide range of data and time series presented in
numerous graphs and tables illustrates the core of economic principles. The Czech
Republic and its economic development is in the spotlight, however, it is not viewed in
isolation but within the context of international development, particularly in Europe.
The book is divided into six sections. Each section covers one of the key parts of
economy. Section I presents the key tool of macroeconomic analysis - the System of
1
Spěváček, V., Rojiček, M., Zamrazilová E., Ždárek V. (2012), Makroekonomická analýza, Linde
Praha, ISBN 978-80-86131-92-4, 608 pages.
2
Ing. Helena Horská, Ph.D., ŠKODA AUTO University, Tř. V. Klementa 869, 293 60 Mladá
Boleslav, Czech Republic.
3
See Predmluva page V.
Volume 13, Issue 1, 2013
59
National Accounts (SNA). It introduces the composition of the SNA and unfolds some
of the macroeconomic identities, including the famous gap between the National Saving
and the National Investment which is equal to the Current Account of Balance of
Payment. Besides more common macroeconomic indicators, such as Gross Domestic
Output or Disposable Income, the section introduces less frequently used Real Domestic
Income or Net Operating Balance. It also explains the difference between collective
consumption and public consumption.
The most extensive part of the book is taken up by Section II “Supply, Demand and
Equilibrium”. It contains four chapters. Chapter 1 briefly presents the basic theories of
economic growth with emphasis to practical aspects. The key contribution of this
Chapter should be seen in discussion on structural analysis including competitiveness.
For example, it illustrates structural bonus and structural burden hypothesis on selected
European countries including the Czech Republic. Chapter 2 covers issues of
international comparison and presents the standard concept of Purchasing Power Parity.
In addition to that, it describes the nominal and real convergence. Aggregate demand
and its components is the main subject of Chapter 3. The aggregate demand is
investigated mostly from a short-term perspective; the mid-term or long-term trends are
put aside. Chapter 4 focuses on the relationship between aggregate supply and aggregate
demand in goods and service market. The harmony between the aggregate supply and
aggregate demand on goods and services is called macroeconomic equilibrium, when
the other markets are eliminated. In other words, the authors apply the narrow definition
of macroeconomic equilibrium.
Section III deals with public finance and fiscal policy issues. It covers highly relevant
topics, such as development in primary and structural budget balance, fiscal rules or
sustainability of the public debt in Europe.
Section IV focuses on Inflation (Chapter I) and Monetary Development (Chapter II). At
the beginning of Chapter I, unit labour costs, as one of the inflationary factors, are
investigated. Chapter I emphasizes technical aspects of inflation (its measuring,
typology...) at the expense of economic nature of this phenomena. Chapter II “Monetary
development” covers a wide range of topics including monetary aggregates, theory and
regimes of monetary policy, foreign exchange rate and its regimes and currency crisis. It
mentions a very relevant topic – the system of early warning.
Section V discusses external economic equilibrium and is divided into three Chapters:
Trade balance, Balance of Payment and Foreign debt. The analysis of the relationships
within the Balance of Payment is the cornerstone of this section.
Section V concludes this book with the subject of labour market (Chapter 1) and
productivity (Chapter 2). Chapter 1 shows, for example, the theory and the usage of the
Beveridge curve and describes the key indicators of labour market very precisely. The
impact of globalization on labour market is shortly presented, too. Chapter 2 goes back
to the subject of unit labour costs (see also Section IV, Chapter 1.3) and discusses
methodological disparities in indicators of wage costs (maybe being detailed a bit too
much).
Each chapter starts with the intent which is followed by keywords. It concludes with
conclusion, a set of problems and exercises, and references. The problems should
REVIEW OF ECONOMIC PERSPECTIVES
60
strengthen understanding the text. Nonetheless, I miss graphs and a list of frequently
used abbreviations in the text.
The book is designed for students of advanced undergraduate courses in
macroeconomics or macroeconomic analysis. It can be used, and I will do so, together
with the theoretical literature in standard advanced macroeconomic courses, or on its
own in the courses of macroeconomic analysis. However, the authors assume
intermediate knowledge of economics and mathematics (and statistics). Readers should
understand some intermediate mathematical and statistical techniques such as functions,
logarithms, derivates, or index number and regression. On the other hand, concepts of
different economic schools and theories are beyond the scope of the book. The text
reflects contemporary mainstream macroeconomics. Nevertheless, the readers might
follow numerous references and study the selected topic more deeply on their own.
Compared to foreign economic textbooks, the book lacks the online learning tools – a
Web site of the textbook, where additional exercises, case studies or practice quizzes
and other useful features including updated macroeconomic figures can be found. The
last one would be especially helpful facing up the challenge to keep the wide data range
presented in the book relevant in the ever-changing economic landscape. Otherwise, I
am afraid that the textbook will go out of date very soon.
In my personal view, the book can provide an excursion to deep analysis of economic
development for professional economists, financial analysts, as well as government
officials and others who would like to know or need to know how to interpret economic
figures.