Trends and factors of the business cycle development in the Czech Republic

The goal of analysis of business cycle development in the Czech Republic is to identify causes and consequences of economic activity fluctuations in the 1990 to 2003 period. The approach to analysis of economic activity fluctuations is based on this part of business cycle theory which is oriented to the links between macroeconomic equilibrium and economic growth. Description of contexts between changes in the economic environment, nature of the demand and supply side of the economy and a character of external and internal balance provides the economic framework for the analysis. The decomposition of supply and demand to its components enabled the identification of their sensitivity to the business cycle development. Special emphasis is put on the indicators of internal and external balances which signal in advance the possibility of an economic slowdown or a drop in the economic activity.