This paper examines the sources of fluctuations in inflation and output in two leading transitioneconomy candidates for … admission to the European Union (EU), Poland and Hungary. Using a rational expectations, dynamic open economy aggregate supply … price level movements in Poland. Monetary shocks are an important source of output fluctuations in the short run in Hungary …

This study examines the link between various monetary policy regimes and the ability to manage inflation and exchange … hypothesis is that a system of 'flexible inflation targeting' may be an optimal policy choice for managing these two categories … of risk. A model of inflation and exchange rate risk premiums within the context of inflation targeting is proposed …

systems reflects a divergence of opinion on the appropriate way to handle macroeconomics and, in particular, to curb inflation …. This paper studies the connection between changes in the exchange rate and inflation as perceived in various exchange rate … low inflation in these countries. To this end we model price and exchange rate changes simultaneously and incorporate …