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Monetary Policy Rules in Central and Eastern European Countries: Does the Exchange Rate Matter?

  • M. FRÖMMEL

    ()

  • G. GARABEDIAN
  • F. SCHOBERT

We estimate monetary policy rules for six central and eastern European countries (CEEC) during the period, when they prepared for membership to the EU and monetary union. By taking changes in the policy settings explicitly into account and by introducing several new methodological features we significantly improve estimation results for monetary policy rules in CEEC. We find that in the Czech Republic, Hungary and Poland the focus of the interest rate setting behaviour switched from defending the peg to targeting inflation. For Slovakia, however, there still seemed to be on ongoing focus on the exchange rate. For Slovenia and only after a policy switch for Romania we find a solid relation with inflation as well.

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Paper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 09/611.

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Length: 27 pages
Date of creation: Aug 2009
Date of revision:
Handle: RePEc:rug:rugwps:09/611
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