, the 3 % maastricht level. for example, the target in the czech republic is not to exceed 4 % of gdp in 2006. nonetheless, it has not yet been fully appreciated that upon eu accession, the stability and growth pact will become relevant to the new member states. admittedly, the application of sanctions will be postponed until a country becomes a member of the eurozone. but even if a country is not a subject to sanctions, as a member of the eu club it should have in place at least a credible programme towards achieving its objectives. moreover, if a country targets relatively early eurozone entry, it should first create a sufficient safety margin above the 3 % deficit limit to be insured against distress - i. e. it should avoid the mistake that has been made by some of the current eurozone members concerning the s & g pact. i hope that the uncertainty surrounding the pact ’ s future would not be viewed as an excuse for delaying necessary fiscal and structural adjustments. even if redefined in a more flexible way, it is quite clear that the structural deficits currently observed in many of the cecs will not be tolerable under the pact, as they will not pass the sustainability and policy mix tests. therefore, the existence of the s & g pact makes the case for fiscal consolidation even more appealing than it might look at first sight. to conclude, let me wish you a very fruitful discussion during this conference, as well as a very pleasant stay in prague. thank you for your attention.

. problems occur if the contributions of human labour and capital calculated in this way are applied to two countries at a different level of development. in such cases, there is a significant degree of divergence between the characteristics of these economies observed in reality and predicted by the model. it had been clear for a relatively long time that if the share of human labour in output was only one - third, solow ’ s model would provide a very good picture of reality in international comparison. to overcome this inconsistency, however, it was necessary to come up with the idea of introducing a new variable in the model that would represent human capital. although this may seem obvious today – as such things always seem to be as soon as someone else thinks of them – it was a novelty in the late 1980s. it was another nobel prize laureate in economics robert lucas who divided human labour into a part reflecting people ’ s general capacity for work, and the contribution of human capital that was a result of previous investment in education. what lucas did was very simple from today ’ s point of view. using the extensive structure of us economic data, he chose the average wage of people with basic education as a basic remuneration of people ’ s capacity for work. then he gradually added the average wage of other people after each finished year of education. the results showed that every additional year of education up to the level of a bachelor ’ s degree increases the wage by 8 % on average. in the united states, if you finish high school and obtain a bachelor ’ s degree, which means you invest eight years in education, you can look forward to a wage two - thirds higher than the wage you would get if you only finished basic education. although lucas ’ s calculations didn ’ t include subsequent stages of education, as the bachelor ’ s degree was sufficient to reduce the share of basic human labour in output and improve solow ’ s original concept, it ’ s clear that things don ’ t stop at the bachelor ’ s degree. on the contrary, one could say, it seems that a simple linear relationship ceases to be valid here, and every additional year brings an even higher wage increase compared to the previous years. regardless of the size of the increase, investment in education is by no means an empty slogan. i wish you that you all become a living proof of this.