A Simple, Model-Independent Analysis of Reasons for Non-Fulfillment of the Declared Inflation Target
In: Evaluation of the Fulfilment of the CNB's Inflation Targets 1998-2007
AbstractIn the period 1998-2007, inflation very often deviated from inflation targets of the Czech National Bank, most of these deviations being in the direction of undershooting the targeted level. In this paper, a purely statistical, model-independent procedure is used to search for an answer to the question of whether this clear asymmetry in inflation target fulfillment can be explained more by an asymmetry in outside shock or an asymmetry of the Czech National Bankâ€™s monetary policy. Our results indicate that the latter explanation is statistically more persuading. For the period since 2002, moreover, it looks like the decisions of the Czech National Bankâ€™s Bank Board more or less sticked to the recommendations implicit in materials supplied by the Bankâ€™s forecasting team; the bias in this second period, at least, can therefore be ascribed to the Bankâ€˜s forecasting apparatus rather than preferences of the Bank Board as revealed in its monetary policy decisions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
This chapter was published in:
This item is provided by Czech National Bank, Research Department in its series Occasional Publications - Chapters in Edited Volumes with number 03.
Contact details of provider:
Postal: Na Prikope 28, 115 03 Prague 1
Phone: 00420 2 2442 1111
Fax: 00420 2 2421 8522
Web page: http://www.cnb.cz/en/research/research_intro/
More information through EDIRC
inflation targeting; inflation persistence; autoregression models;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Volha Audzei & Frantisek Brazdik, 2012. "Monetary Policy and Exchange Rate Dynamics: The Exchange Rate as a Shock Absorber," Working Papers 2012/09, Czech National Bank, Research Department.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Babecky).
If references are entirely missing, you can add them using this form.