We argue that the choice of exchange rate regime in the process of accession to the European Union and EMU can affect the growth rate of the economy in the medium term. Empirical analysis is employed. We discuss the effects of exchange rate choice, and of the timing of transition to EMU on the...

What is the optimal rate of disinflation to be targeted during transition? This question has attracted more attention under the inflation-targeting regime than under other monetary strategies, because explicit inflation targets are used to anchor expectations. These targets signal what rate of...

Computed fundamental real exchange rates in four acceding countries point out to difficulties in entering the ERM II too soon after the EU entry. Computations suggest that it is unlikely for the Czech, Hungarian and Polish economies to maintain low inflation during 2004-2010, and at the same...

Monetary policy makers need to build two pillars for their inflation targeting strategy. Firstly, a methodology for producing the central forecast should be developed, since the whole decision process is more easily organised around a model forecast. Secondly, a methodology for dealing with...

In view of the institutional and economic magnitude of Eurozone enlargement, the effects on EU member states – old members as well as new – may in no way be taken lightly. It is, therefore, important to repeatedly confront the issue: “When and how to introduce the euro”. In essence,...

In December 1997, the Czech Republic became the first transitional economy to adopt an inflation-targeting (IT) framework. This paper addresses two important topics: optimal inflation-targeting horizon and optimal speed of disinflation. A small, aggregate, forward-looking model of the Czech...

In 1992, the political dissolution of Czechoslovakia highlighted the problem of designing monetary disintegration for two interdependent republics. In this study, the exchange-rate system of the two newly established currencies that was an analogy to the currency union was described. The newly...

The paper tries to derive lessons from the UK experience with inflation targeting (IT) for the Czech monetary policy. Reasons for introducing the IT in both countries have been very similar. After intermediate targets failed, both central banks searched for a new strategy. When implementing the...

The paper analyzes the impact of voucher privatization scheme on behavior of households and its consequences for macroeconomic policy. The stylized facts of the voucher privatization scheme are described for the Czech case. The consumption as well as portfolio decision of households during the...

The introduction of inflation targeting (IT) by the Czech National Bank in 1997 was an important event in history of IT since the Czech Republic was the first transitional country to adopt it. This study has been the first document describing consistently the Czech approach to IT. It reviews the...