This paper aims at estimating the exchange rate pass-through (ERPT) for the Czech Republic. The existing empirical literature does not come to a consensus about the degree of pass-through to Czech inflation. Since there is no unique approach regarding how to measure ERPT, the author uses 11...

This paper reviews price-level targeting in the light of current theoretical knowledge and past practical experience. The authors discuss progress in the economic debate on this issue, starting with the traditional arguments discussed in the early 1990s and ending with the most recent literature...

To provide a rigorous analysis of monetary policy in the face of financial instability, the authors extend the standard dynamic stochastic general equilibrium model to include a financial system. Their simulations suggest that if financial stability affects output and inflation with a lag, and...

This paper compares the accuracy of the Consensus forecasts for euro-area GDP growth, consumer and producer price inflation, and the USD/EUR exchange rate to those of the European Commission, International Monetary Fund, and Organization for Economic Co-operation and Development, and also to the...

We examine how written and oral central bank communications affect the level and volatility of interest rates. We use detailed daily data on the Czech central bank’s communication in 2007–2012. We find that financial markets respond to central bank communication. Short-term interest rates...

The ex post analysis of inflation-target fulfillment plays an important role in the inflation-targeting framework. The major benefits of ex post analysis are threefold. First, it improves forecast accuracy. Knowledge of the main sources of previous forecast inaccuracies helps to better...

This paper deals with theoretical and empirical dimension of publishing interest rates projections by central banks. Its first goal is to review arguments in favor of and against this decision and to illustrate the debate using experience of four central banks which publish or used to publish...

The first 10 years of Czech Republic's inflation targeting regime have been remarkable by the persistent undershooting of the inflation targets. This article is an introduction to a special issue aimed at analyzing the factors of the undershooting. The articles in this issue explore the...

In this paper, the authors link real exchange rates and optimum currency area criteria. The authors examine the hypothesis that countries not fulfilling optimum currency area criteria in full will tend to have volatile bilateral real exchange rate. The authors find that, based on a study of data...

This paper discusses central bank losses and develops a formal framework for assessing the sustainability of its balance sheet. Analyzing the consequences of economic convergence in depth, it emphasizes the role played by the risk premium and equilibrium real exchange rate appreciation. A...