Inflation and Deflation in the Czech Republic since 1998

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The state of Czech Republic had gone through different turns in history. These changes have surely affected the progress of its economy both positively and negatively. Czech was actually part of Austro Hungarian Empire until World War I in 1918. Later it became part of Czechoslovak state.


Czechoslovak was famous for export industries, especially automotive ones then. But the major policy change stopped the export growth of the state. Even though the following governments tried some measures to keep economy strong, nothing could help. The Communist Regime allowed only state owned enterprises and state lead economic planning. It relied more on artificial pricing of commodities. No political, cultural or economic liberalization was allowed. Year after year the situation became worse only and it led to a total tragedy within a few decades.
By 1980s, Czechoslovakia started facing deep crisis and people started protesting. In the initial days the protests were not so strong and the Government tried to suppress it. But it was not possible. Protests gathered momentum and by 1989 the Communist Government resigned. It was followed by democratic election which was the beginning of a new era as far as the history of Czechoslovakia is concerned. The major policy change in USSR allowing liberalization at to a limited extent and the weakening of power of Communists in neighboring states like East Germany and Poland also influenced the developments which led to the situation of Communists loosing power in Czechoslovakia.
In the elections conducted in 1990, Vclav Havel got elected as President. The new Government formed under his leadership decided anyway to march away from the track of Communism. ...
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