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Asymmetric Monetary Policy in the Czech Republic?

Roman Horvath

Chapter 9 in Evaluation of the Fulfilment of the CNB's Inflation Targets 1998-2007, 2008, pp 117-130 from Czech National Bank

Abstract: This paper analyses a hypothesis, whether an asymmetric monetary policy could contribute to the undershooting of the inflation targets of the Czech National Bank in the years 1998-2007. To this goal, a non-linear Taylor Rule has been estimated. The results indicate that – upon the introduction of inflation targeting – the Czech National Bank responded more aggressively to forecasts of inflation heading above the target. That asymmetric monetary policy, however, disappears if we perform estimates of the monetary policy rule exclusively on the basis of more contemporary data (approx. 2002-2007). Therefore, it could be deemed that symmetric handling of the inflation targets prevailed in the past several years.

Keywords: Monetary policy rule; inflation target; Czech National Bank (search for similar items in EconPapers)
JEL-codes: E31 E43 E52 E58 (search for similar items in EconPapers)
Date: 2008
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