The global financial and debt crisis highlights the need for a better understanding of how fiscal and monetary policies interact. This article examines three aspects of these interactions, as seen from the perspective of the Czech National Bank. It first looks at the effects of fiscal policy on...

This paper uses firm-level financial data for Czech firms in the period from 2003 to 2011 and tests for the role of companies' financial structure in the transmission of monetary policy. Our results indicate that higher short-term interest rates coincide with lower shares of total debt and...

This study examines the impact of various monetary policy regimes on the ability to lower inflation and exchange rate risk premiums in the EU accession countries as they undergo monetary convergence to the eurozone. It proposes a monetary policy framework of flexible targeting of relative...

A flexible approach to direct inflation targeting offers the European Union accession countries a viable monetary policy choice that is believed to facilitate both the economic transition and the monetary convergence to the eurozone. Following this assumption, a model investigating the nexus...

The paper analyses the potential for lending booms in the three biggest new EU Member States (the Czech Republic, Hungary and Poland) during the process of euro adoption. Experiences of some old members (Greece, Ireland and Portugal) and the econometric evidence speak in favour of strong loan...

This paper analyzes the link between the choice of exchange rate regime and inflationary performance in four acceding countries to the EU: the Czech Republic, Hungary, Poland and Slovenia. The results allow a clear ranking of countries according to the size of the pass-through effect and the...

This paper uses firm-level financial data for Czech firms and tests for the role of companies’ financial structure in the transmission of monetary policy. Our results indicate that higher short-term interest rates coincide with lower shares of total debt, short-term bank loans, and...

We use a structural VAR model with short-term restrictions to investigate the relative importance of interest rate, exchange rate and credit channels in the monetary policy transmission (MPT) for the Czech Republic, Hungary and Poland over 1993:1-2004:3. Main results are as follows. First, in...

A monetary policy framework based on targeting a relative inflation-forecast is proposed for the economies converging to the euro. Such strategy aims at containing the differentials between the domestic and the implicit monetary union inflation-forecasts. Hence, these differentials become a...