Prague Economic Papers, 2000 (vol. 9), issue 3

Original contributions, Original article, Research article

In search for a new anchor: inflation targeting in the czech republic

Jiří Jonáš

Prague Economic Papers 2000, 9(3) | DOI: 10.18267/j.pep.78

In December 1997 the Czech National Bank introduced a new framework for the conduct of monetary policy, inflation targeting. This article examines the preliminary experience with inflation targeting in the Czech Republic. In the second part, we discuss the reasons that have led the Czech National Bank to introduce this monetary policy framework. Third part describes principal operational features of inflation targeting in the Czech Republic, and discusses the specifics of inflation targeting under the conditions of an economy in transition. Fourth part reviews the conduct of monetary policy under the new regime, focusing particularly on how the new...

The czech experience with inflation targeting in transition

Kateřina Šmídková, Miroslav Hrnčíř

Prague Economic Papers 2000, 9(3) | DOI: 10.18267/j.pep.79

This paper argues that inflation targeting is a strategy that can be under certain conditions adopted by central banks in countries in transition even though their typical goal is to disinflate instead of stabilising low inflation. On the one hand, according to the Czech experience, inflation targeting offers several benefits, such as increasing control over expectations and short-term flexibility of monetary strategy, that are attractive for economy in transition. On the other hand, constraints imposed by period of transition as well as by openness of economy are present no matter which monetary strategy is chosen by the central bank. Implied costs...

The czech embarrassment of inflation targeting in transition

Martin Mandel, Vladimír Kosmata

Prague Economic Papers 2000, 9(3) | DOI: 10.18267/j.pep.80

In 1998 the Czech National Bank (CNB) changed its monetary policy framework and started to target inflation. The article discusses main theoretical aspects of inflation targeting and some practical problems with implementation of inflation targeting. The main characteristics of the inflation and monetary targeting are described in the first and second part. The third part deals with practical issues connected with inflation targeting (number of countries using inflation targeting, quality of inflation predictions, inflation and interest rate volatility). In the final part the CNB monetary policy function is estimated and the results are compared with...

Large bank privatization and economic transformation in the czech republic in the nineties

Donald G. Simonson

Prague Economic Papers 2000, 9(3) | DOI: 10.18267/j.pep.81

This paper examines the two crucial factors in Czech banking policy that explain why Czech banks were not an effective support for economic restructuring in the nineties. These factors are: the subsistence of unrestructured, non-viable firms that undermined development of banks' debt monitoring role and stunted the development of bankruptcy and commercial laws needed to support credit creation and, delays in privatizing the large bank hegemony that rendered the banks themselves unrestructured, undercapitalized and poorly competitive with foreign institutions.

The comovements of the short interest rates in central and east european countries

Martin Scheicher

Prague Economic Papers 2000, 9(3) | DOI: 10.18267/j.pep.82

This paper analyses the short rates of emerging markets in Central and Eastern Europe. We first summarize the institutional framework of money and bond markets. In the empirical section we estimate both univariate and multivariate models. We collect the statistical behavior and discuss the volatility of the series. We then analyze the evidence for the existence of comovements with a number of alternative methods. In brief our main result is that the short rates in Prague, Warsaw and Budapest do not interact with the benchmark instantaneous rate in Germany.

Monopolistic credit market in the conditions of imperfect information

Karel Janda

Prague Economic Papers 2000, 9(3) | DOI: 10.18267/j.pep.83

Imperfect information in the monopolistic credit market could lead to the rejection of credit provision to some applicants for credit. The choice of which class of borrowers is rejected credit depends on the relations among some characteristics of borrowers. The inefficiency of credit market could be alleviated by government credit guarantees.

Search