Monetary Policy Rules in Central and Eastern European Countries: Does the Exchange Rate Matter?

Michael Frömmel, G. Garabedian and Franziska Schobert

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

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 introducing several new methodological features we significantly improve estimation results for monetary policy rules in CEEC. We find that in the Czech Republic, Hungary and Poland the focus of the interest rate setting behaviour switched from defending the peg to targeting inflation. For Slovakia, however, there still seemed to be on ongoing focus on the exchange rate. For Slovenia and only after a policy switch for Romania we find 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)
Pages: 27 pages
Date: 2009-08
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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http://wps-feb.ugent.be/Papers/wp_09_611.pdf (application/pdf)

Related works:
Journal Article: Monetary policy rules in Central and Eastern European Countries: Does the exchange rate matter? (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:09/611

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