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Basic Characteristics of Inflation Targeting in the Czech Republic

In: Evaluation of the Fulfilment of the CNB's Inflation Targets 1998-2007

Author

Listed:
  • Juraj Antal
  • Michal Hlavacek
  • Tomas Holub

Abstract

This paper investigates basic characteristics of inflation targeting in the Czech Republic. The first part of the paper starts by briefly indicating some general macroeconomic conditions of inflation targeting in the Czech Republic, including the identification of the main shocks, which affected them. In addition, the extent of non-fulfilment of the inflation target in the Czech Republic is compared to the experience of several inflation targeting foreign countries. A comparison of the inflation target fulfilment in various phases of inflation targeting reveals a changing success rate in the fulfilment of the target in time. While deviations of inflation from the targets were very high in international comparison in the early phase of inflation targeting, the Czech National Bank has lately come closer to the characteristics of relatively more successful inflation targeters.

Suggested Citation

  • Juraj Antal & Michal Hlavacek & Tomas Holub, 2008. "Basic Characteristics of Inflation Targeting in the Czech Republic," Occasional Publications - Chapters in Edited Volumes, in: Katerina Smidkova (ed.), Evaluation of the Fulfilment of the CNB's Inflation Targets 1998-2007, chapter 2, pages 18-34, Czech National Bank.
    • Handle: RePEc:cnb:ocpubc:02
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    References listed on IDEAS

    as
    1. Johnson, David R., 2002. "The effect of inflation targeting on the behavior of expected inflation: evidence from an 11 country panel," Journal of Monetary Economics, Elsevier, vol. 49(8), pages 1521-1538, November.
    2. Katerina Smidkova & Jiri Behounek & Tibor Hledik & Josef Jilek & Miroslav Kostel & Ivana Matalikova & Dana Rottova & Jana Stankova, 1998. "Koruna Exchange Rate Turbulence in May 1997," Archive of Monetary Policy Division Working Papers 1998/02, Czech National Bank.
    3. Laurence M. Ball & Niamh Sheridan, 2004. "Does Inflation Targeting Matter?," NBER Chapters, in: The Inflation-Targeting Debate, pages 249-276, National Bureau of Economic Research, Inc.
    4. Tomáš Holub & Jaromír Hurník, 2008. "Ten Years of Czech Inflation Targeting: Missed Targets and Anchored Expectations," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 44(6), pages 67-86, November.
    5. Adam Geršl & Tomáš Holub, 2006. "Foreign Exchange Interventions Under Inflation Targeting: The Czech Experience," Contemporary Economic Policy, Western Economic Association International, vol. 24(4), pages 475-491, October.
    6. Lin, Shu & Ye, Haichun, 2007. "Does inflation targeting really make a difference? Evaluating the treatment effect of inflation targeting in seven industrial countries," Journal of Monetary Economics, Elsevier, vol. 54(8), pages 2521-2533, November.
    7. Mr. Scott Roger & Mr. Mark R. Stone, 2005. "On Target? the International Experience with Achieving Inflation Targets," IMF Working Papers 2005/163, International Monetary Fund.
    8. Ales Bulir & Katerina Smidkova & Viktor Kotlan & David Navratil, 2007. "Inflation Targeting and Communication: Should the Public Read Inflation Reports or Tea Leaves?," Working Papers 2007/14, Czech National Bank.
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    Cited by:

    1. Juraj Antal & Michal Hlavacek & Roman Horvath, 2008. "Prediction Bias and Undershooting of the Inflation Target," Occasional Publications - Chapters in Edited Volumes, in: Katerina Smidkova (ed.), Evaluation of the Fulfilment of the CNB's Inflation Targets 1998-2007, chapter 5, pages 57-76, Czech National Bank.

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    More about this item

    Keywords

    macroeconomics; monetary policy; inflation targeting;
    All these keywords.

    JEL classification:

    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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