Abstract
Research background:The global outbreak of the COVID-19 and, as a result, the measures taken fundamentally disrupted the lives of people and economies. Private and public demand, industrial production, supply chains, etc. were affected. Given the severity of these shock changes, it is clear that the European Union will have experienced a severe economic recession.Purpose of the article:Economists have long pointed to the Czech economy’s strong dependence on the automotive industry. Carmakers and a number of companies connected to them have been chained into existential difficulties after COVID-19 outbreak. However, the scenario of redirecting the industry is not real.Methods:The article maps the declines in the forecast of GDP development in 2020 and 2021 in selected EU countries and statistically evaluates the historical dependence of Czech exports on German car production.Findings & Value added:According to predictions, the Czech Republic expects the highest negative deviations in comparison with other EU countries. Reality will show what role a strong dependence on the automotive industry plays in this. The results of the statistics of the previous decade do not confirm the fundamental dependence of Czech exports on German automobile production. As the results indicate, Czech exporters are already diversifying at least in the sense of the target markets. The author raises the question whether the concept of public belief in the importance of supporting Czech carmakers as important producers of GDP on the export side can be the result of a strong lobbying by carmakers.
Highlights
The global COVID-19 pandemic outbreak and, as a result, the containment measures taken have profoundly disrupted people’s lives and the economies
Given the severity of these shock changes, it is clear that the European Union will have experienced a severe economic recession
Czech exporters are already diversifying at least in the sense of the target markets
Summary
The global COVID-19 pandemic outbreak and, as a result, the containment measures taken have profoundly disrupted people’s lives and the economies. As regards the pre-existing conditions, the relationship between the economic cyclicality of the EU countries that accepted euro as their national currency and the efficiency of a monetary union in a situation of a non-existing fiscal stabilization mechanism, limited labor factor mobility and economic heterogeneity of the member states is often discussed (see more in [5,6,7]). Another important pre-existing economic condition is the state of dependence and tight linkage to one or a small group of export economies. In this context (in accordance with the input data of the model) we ask to what extent the Czech Republic's car exports depend on German car sales
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