Monetary policy rules in Central and Eastern European Countries: Does the exchange rate matter?

Michael Frömmel, Garo Garabedian and Franziska Schobert

Journal of Macroeconomics, 2011, vol. 33, issue 4, 807-818

Abstract: We estimate monetary policy rules for six Central and Eastern European Countries (CEEC) during the period when they prepared for membership to the EU and monetary union. By taking changes in the policy settings explicitly into account and by splitting up the exchange rate impact into two different components we significantly improve estimation results for monetary policy rules in CEEC. We uncover that the focus of the interest rate setting behaviour in the Czech Republic, Hungary and Poland explicitly switched from defending the peg to targeting inflation. For Slovakia, however, there still seemed to be on ongoing focus on the exchange rate. Finally, Slovenia and, after a policy switch, Romania exhibit a solid relation with inflation as well.

Keywords: Monetary policy; Taylor rules; Transition economies; CEEC; Inflation targeting (search for similar items in EconPapers)
JEL-codes: E52 E58 P20 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0164070411000450
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Monetary Policy Rules in Central and Eastern European Countries: Does the Exchange Rate Matter? (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:33:y:2011:i:4:p:807-818

DOI: 10.1016/j.jmacro.2011.05.003

Access Statistics for this article

Journal of Macroeconomics is currently edited by Douglas McMillin and Theodore Palivos

More articles in Journal of Macroeconomics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().