Prague Economic Papers 2006, 15(2):113-134 | DOI: 10.18267/j.pep.280

Institutional Conditions of Monetary Policy Conduct in the Czech Republic

Petr Sedláček
Student of the Faculty of Economics and Public Administration, University of Economics, Prague and the Philosophical Faculty, Department of Psychology, Charles University, Prague (e-mail: petr.sedlacek@email.cz); Czech Statistical Office, Department of Macroeconomic Analysis (e-mail: petr.sedlacek@czso.cz).

This paper tries to assess the conditions under which the CNB operates. Using a basic framework suggested by Mishkin (2000), the aim is to find out whether the central bank is able to conduct high-quality monetary policy. First, general principles that central banks should follow to succeed in their pursuit of monetary goals are theoretically introduced. Then, these theoretical principles are looked at in the Czech context. Issues of the strictness and suitability of concrete monetary policy of the CNB will not be dealt with, rather institutional circumstances that potentially allow successful policy are at the centre of this paper. It is concluded that the CNB is functioning in a moderately good environment, but still much room for improvement does exist.

Keywords: monetary policy, independence, accountability, central bank, institution, price stability, benchmark
JEL classification: E50, E52, E58, E61

Published: January 1, 2006  Show citation

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Sedláček, P. (2006). Institutional Conditions of Monetary Policy Conduct in the Czech Republic. Prague Economic Papers, 15(2), 113-134. doi: 10.18267/j.pep.280
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