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We offer a detailed empirical investigation of the European sovereign debt crisis based on the theoretical model by Arghyrou and Tsoukalas (2010). We find evidence of a marked shift in market pricing behaviour from a 'convergence-trade' model before August 2007 to one driven by macro-fundamentals and international risk thereafter. The majority of EMU countries have experienced contagion from Greece. There is no evidence of significant speculation effects originating from CDS markets. Finally, the escalation of the Greek debt crisis since November 2009 is confirmed as the result of an unfavourable shift in country specific market expectations. Our findings highlight the necessity of structural, competitiveness-inducing reforms in periphery EMU countries and institutional reforms at the EMU level enhancing intra-EMU economic monitoring and policy co-ordination.

This bachelor thesis deals with the fulfillment of the Maastricht convergence criteria in conditions of the Czech Republic. At the beginning of the thesis, the development of the monetary cooperation in Europe and the establishment of the European Monetary Union are outlined. Then the Maastricht convergence criteria are described as well as the progression of their fulfillment by member countries of the European Union before the establishment of the Euro-area. The main part focuses on the situation in the Czech Republic. The convergence of the Czech Republic with the Euro-area is closely evaluated and its development is compared with Slovakia. The conclusion deals with the impacts of accepting Euro in the Czech Republic and the speculation on a possible date of entry into the European Monetary Union.

Using euro-area data, we re-examine the empirical success of New Keynesian Phillips Curves (NKPCs). The nature of our re-evaluation relies on the actual empirical underpinnings of such estimates: we find existing estimates un-robust and – given that key parameters are generally calibrated rather than estimated – potentially at odds with the data. We re-estimate with a wellspecified optimizing supply-side (which attempts to treat non-stationarity in factor income shares and mark-ups) and this allows us to derive estimates of technology parameters and marginal costs. Our resulting estimates of the euro-area NKPCs are robust, provide reasonable estimates for fixed-price durations and discount rates and embody plausible dynamic properties. Our method for identifying and estimating New Keynesian Phillips curves has general applicability to a wide set of countries and might also be used in identifying sectoral NKPCs.