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Identifying central bank’s preferences: the case of Poland

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  • Brzozowski, Michal

    (Department of Economics, Warsaw University)

Abstract

We seek to test the hypothesis that the weight on output gap variability in the central bank’s loss function is equal to zero in Poland. To that end we derive monetary policy reaction function from the central bank’s optimization problem. We find that the weights assigned to target variables were not constant over the period 1995-2003. The weight attached to inflation stabilization objective in the central bank’s loss function in Poland was equal to the weight assigned to output gap stabilization in the period 1995-1999 and the latter goal has been disregarded since 2000.

Suggested Citation

  • Brzozowski, Michal, 2004. "Identifying central bank’s preferences: the case of Poland," Working Papers in Economics 143, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0143
    as

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    File URL: http://hdl.handle.net/2077/2772
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    References listed on IDEAS

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    More about this item

    Keywords

    Monetary policy reaction function; central bank’s loss function; New Keynesian Phillips curve;
    All these keywords.

    JEL classification:

    • 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
    • P24 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation

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