The Czech economy as an integrated periphery: The case of dependency on Germany. Issue 1 (8th February 2019)

• Record Type: Journal Article
• Authors: Krpec, Oldřich; Hodulák, Vladan
• Is Part Of: Journal of post Keynesian economics. Volume 42:Issue 1(2019)
• Page Start: 59
• Page End: 89
• Publication Date: 2019-02-08
• Subjects: Convergence -- Czech Republic -- dependency -- neoliberalism; F21 -- O24 -- O25 -- O47; 330.15
• DOI: 10.1080/01603477.2018.1431792
• Languages: English
• ISSNs: 0160-3477

Abstract

ABSTRACT: The Czech Republic (CZ) is a small open economy that has been integrated into the European economy predominantly through its ties to Germany. Traditional analysis has focused on the positive aspects of this process and pointed out the favorable indicators of the Czech economy, strongly influenced by a modernist perspective (model of economic development) and neoliberalism (applied economic policies). The aim of this article is a more critical reflection on some important features of the Czech economic model. The application of some currently emerging analytic instruments of international economic relations allows us to point out many problematic features of the Czech economy—in particular its dependence on foreign capital combined with a weak ability to retain it and the low added value created within the CZ. There are indicators suggesting a dependent growth within a rigid pattern of an international division of labor and wealth distribution. We argue that shortcomings of the neoliberal model of development (even) in the case of a well prepared and governed economy are a good reason to bring the insights of dependency theory back into the discussion.