Understanding Inflation Expectations in the Czech Economy: Data, Drivers, and Policy Implications

František Brázdik, Tatiana Keseliová, Karel Musil, Radek Šnobl, FJan Šolc, Stanislav Tvrz and Jan Žáček
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Tatiana Keseliová: Czech National Bank
Karel Musil: Prague University of Economics and Business
Radek Šnobl: Czech National Bank
FJan Šolc: Czech National Bank

International Journal of Central Banking, 2026, vol. 22, issue 1, 145-192

Abstract: We investigate inflation expectations and their measures amid the 2022 surge in the Czech Republic. Using data and econometric analyses, we explore how inflation expectations are formed and how they may affect inflation developments. To capture the overall trend of inflation expectations in the Czech economy, we develop a Common Inflation Expectations index. Additionally, we extend the CNB’s g3+ core projection model by incorporating endogenous expectation premiums that reflect elevated inflation expectations. Utilizing the Common Inflation Expectations index and the modified model, we construct a simulation that provides policy-relevant outcomes when addressing high inflation.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2026:q:1:a:4

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