EconPapers    
Economics at your fingertips  
 

Why and How to Assess Inflation-Target Fulfillment

Jan Filáèek ()
Additional contact information
Jan Filáèek: Czech National Bank, http://www.cnb.cz/cz/index.html

Authors registered in the RePEc Author Service: Jan Filáček

Czech Journal of Economics and Finance (Finance a uver), 2007, vol. 57, issue 11-12, 577-594

Abstract: The ex post analysis of inflation-target fulfillment plays an important role in the inflation-targeting framework. The major benefits of ex post analysis are threefold. First, it improves forecast accuracy. Knowledge of the main sources of previous forecast inaccuracies helps to better understand the current state of the economy and prevents a central bank from producing systematically biased forecasts. Second, it elucidates the abilities and limitations of forecasts used in central-bank decision making. Third, it enhances monetary-policy transparency and credibility.The primary aim of the paper is to propose a methodological framework for assessing inflation-target fulfillment based on partial simulations, as applied in the Czech National Bank. In order to demonstrate the applicability of this framework, the authors analyze the performance of the bank between 2002 and 2006. They show that inflation targeting in this period might have been negatively affected by biased variables describing external developments.

Keywords: central bank; inflation target; monetary-policy performance (search for similar items in EconPapers)
JEL-codes: E47 E58 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://journal.fsv.cuni.cz/storage/1094_fau_11_12_2007_000000000089.pdf (application/pdf)

Related works:
Working Paper: Why and How to Assess Inflation Target Fulfilment (2007) Downloads
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:fau:fauart:v:57:y:2007:i:11-12:p:577-594

Access Statistics for this article

More articles in Czech Journal of Economics and Finance (Finance a uver) from Charles University Prague, Faculty of Social Sciences Contact information at EDIRC.
Bibliographic data for series maintained by Lenka Herrmannova ().

 
Page updated 2021-04-12
Handle: RePEc:fau:fauart:v:57:y:2007:i:11-12:p:577-594