Inflation persistence has been put forward as one of the potential reasons of divergence among euro area members. It has also been proposed that the new EU Member States (NMS) may struggle with even higher persistence due to convergence factors. We argue that persistence may not be as different...

The text is focused on problematic of modelling of Czech household´s demand for financial assets in the period of voucher privatisation which were accompany with important finance innovation - installation a vouchers to the finance portfolio of Czech households. The concentration of text is on...

The stability and credibility of a national currency is one of the key factors for successful national economic development. Knowledge of the long-run demand for money helps the monetary authorities to determine what is the rate of growth of the money stock that would not lead to an excessive...

This study analyses the various macroeconomic opportunities and challenges created by the foreign direct investment (FDI) inflows in the new member states. This essay focuses on the various macroeconomic opportunities and challenges created by the foreign direct investment (FDI) inflows in the...

Are there indications of real exchange rate misalignment in the case of the five pre-accession countries? Will stable real exchange rates, required by two of the Maastricht criteria, be in line with economic fundamentals in the pre-EMU period? In order to address these questions, we employ the...

This paper argues that inflation targeting is a strategy that can be under certain conditions adopted by central banks in countries in transition even though their typical goal is to disinflate instead of stabilising low inflation. On the one hand, according to the Czech experience, inflation...

When currency turbulences hit the CZK in May 1997, the research presented in this paper had been nearly finished. It tried to contribute to the discussion of sustainability of external development of the Czech economy by comparing signals given by a set of indicators to signals implied by 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 new EU members point to difficulties in jointly entering the ERM II soon after the EU entry. Three currencies out of the four were overvalued prior to EU entry. Computations suggest that it is unlikely that the Czech, Hungarian and Polish...