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Selecting inflation indicators under an inflation targeting regime: evidence from the MCL method

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Author Info
Koskinen, Juha-Pekka () (University of Technology)
Koivu, Tuuli () (BOFIT)
Chowdhury, Abdur () (United Nations Economic Commission for Europe)

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Abstract

This paper seeks to fill a gap in the literature by analyzing inflation in Poland, one of only two transition economies that have adopted a strict inflation-targeting policy. The paper also introduces a new method for selecting inflation indicators. Consistent with the earlier literature, empirical results find a strong link between the producer price index and consumer price index in Poland. This shows the importance of the manufacturing sector in determining the price level in the country. Overall, wages, broad money supply and the exchange rate are good indicators of inflation.

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Publisher Info
Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 16/2004.

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Length: 31 pages
Date of creation: 01 Sep 2004
Date of revision:
Handle: RePEc:hhs:bofitp:2004_016

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Related research
Keywords: inflation Poland MCL method

References listed on IDEAS
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  1. Svensson, Lars E. O., 2000. "Open-economy inflation targeting," Journal of International Economics, Elsevier, vol. 50(1), pages 155-183, February. [Downloadable!] (restricted)
    Other versions:
  2. Laurence M. Ball & Niamh Sheridan, 2003. "Does Inflation Targeting Matter?," IMF Working Papers 03/129, International Monetary Fund. [Downloadable!]
  3. Welfe, Aleksander, 2000. "Modeling inflation in Poland," Economic Modelling, Elsevier, vol. 17(3), pages 375-385, August. [Downloadable!] (restricted)
  4. Robert F. Westcott & Peter F. Christoffersen, 1999. "Is Poland Ready for Inflation Targeting?," IMF Working Papers 99/41, International Monetary Fund.
  5. Frederic S. Mishkin, 2002. "Does inflation targeting matter? - commentary," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 149-154. [Downloadable!]
  6. Kim, Byung-Yeon, 2001. "Determinants of Inflation in Poland: A Structural Cointegration Approach," BOFIT Discussion Papers 16/2001, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
  7. Frederic S. Mishkin, 1999. "International Experiences with Different Monetary Policy Regimes," NBER Working Papers 6965, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Mark E. L. Griffiths & Thierry Pujol, 1996. "Moderate Inflation in Poland: A Real Story," IMF Working Papers 96/57, International Monetary Fund.
  9. Staff Team, 2002. "Republic of Poland: Selected Issues and Statistical Appendix," IMF Staff Country Reports 02/128, International Monetary Fund.
  10. Laurence Ball & Niamh Sheridan, 2003. "Does Inflation Targeting Matter?," NBER Working Papers 9577, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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