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Ex ante Dynamics of Real Effects of Monetary Policy: Theory and Evidence for Poland and Russia, 2001–2003

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  • Wojciech W Charemza

    ()
    ([1] National Bank of Poland, BBM, Warsaw, Poland [2] University of Leicester, Leicester, UK.)

  • Svetlana Makarova

    ([1] National Bank of Poland, BBM, Warsaw, Poland [2] European University at St Petersburg, St Petersburg, Russia)

Abstract

This paper proposes a new indicator of the expected real effects of an inflation-targeting monetary policy. This indicator can be derived from a simple two-dimensional vector autoregressive model of inflation and the output gap. A simulation experiment illustrates its rationale for timing monetary decisions, if the control of output is a secondary policy target. Applied for Poland, this might have contributed to a policy that would have reduced Polish inflation in 2003 and increased output growth in 2004. We also show how this indicator can be applied for RussiaComparative Economic Studies (2006) 48, 458–479. doi:10.1057/palgrave.ces.8100180

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal Comparative Economic Studies.

Volume (Year): 48 (2006)
Issue (Month): 3 (September)
Pages: 458-479

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Handle: RePEc:pal:compes:v:48:y:2006:i:3:p:458-479

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  1. Tomasz Lyziak, 2002. "Monetary transmission mechanism in Poland.The strenght and delays," National Bank of Poland Working Papers 26, National Bank of Poland, Economic Institute.
  2. Uhlig, H.F.H.V.S., 1999. "What are the Effects of Monetary Policy on Output? Results from an Agnostic Identification Procedure," Discussion Paper 1999-28, Tilburg University, Center for Economic Research.
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  8. Whelan, Karl, 2004. "Staggered price contracts and inflation persistence: some general results," Working Paper Series 0417, European Central Bank.
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  17. Gert Wehinger, 2000. "Causes of Inflation in Europe, the United States and Japan: Some Lessons for Maintaining Price Stability in the EMU from a Structural VAR Approach," Empirica, Springer, vol. 27(1), pages 83-107, March.
  18. Arrazola, Maria & de Hevia, Jose, 2002. "An alternative measure of core inflation," Economics Letters, Elsevier, vol. 75(1), pages 69-73, March.
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As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Wojciech Charemza
    by Metablog Obserwatora Finansowego in Obserwator Finansowy on 2009-12-10 11:59:58
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Cited by:
  1. Wojciech Charemza & Svetlana Makarova & Imran Shah, 2013. "Making the most of High Inflation," Discussion Papers in Economics 13/01, Department of Economics, University of Leicester.

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