The paper first describes how the Czech National Bank (CNB) moved gradually from a fixed exchange rate regime to the frontiers of Inflation-Forecast Targeting. It then focuses on the CNB’s recent experience in adding the exchange rate as a complementary monetary policy tool to stimulate...

Many central banks target an inflation rate near two percent. This essay argues that policymakers would do better to target four percent inflation. A four percent target would ease the constraints on monetary policy arising from the zero bound on interest rates, with the result that economic...

Output gap estimates are subject to a wide range of uncertainty owing to data revisions and the difficulty in distinguishing between cycle and trend in real time. This is important given the central role in monetary policy of assessments of economic activity relative to capacity. We show that...

We develop a simple semistructural model for the Rwandan economy to better understand the monetary policy transmission mechanism. A key feature of the model is the introduction of a modified uncovered interest parity condition to capture key structural features of Rwanda’s economy and...

This paper seeks to draw lessons from the IMF’s experience in handling financial crises around the globe over the past ten years that are relevant to the challenges faced by countries in Latin America, especially in the wake of the recent crisis in Argentina. Experience suggests that...

This study examines external and domestic influences on Latin America’s economic performance over the past decade and a half. It notes that over the past few years, macroeconomic policies have strengthened and structural reforms have been implemented. Together with a favorable external...

This paper examines Turkey’s 2004 Article IV Consultation and Eighth Review Under the Stand-By Arrangement and Request for Waiver of Nonobservance of Performance Criterion. Economic performance over the last three years has been impressive. For the medium term, the main challenge is to...

This Selected Issues paper examines the main factors explaining Ukraine’s growth performance so far, assesses whether the recent recovery is sustainable, and provides a quantitative analysis of long-term growth prospects. It finds that the recent recovery is not yet self-sustaining and...

This Selected Issues paper takes a close look at the proximate determinants and short-term dynamics of inflation in Switzerland. It identifies salient features of the inflation experience in Switzerland. The paper uses a wage-price model to gauge the sensitivity of inflation to the business...

This 2003 Article IV Consultation highlights that the macroeconomic developments in the Russian Federation remained generally strong, with a third consecutive year of considerable GDP growth, fiscal surplus, and large current account surplus. The economy continues to benefit from the earlier...