Inflation targeting in the UK: Lessons for the Czech Republic

Katerina Smidkova

Macroeconomics from University Library of Munich, Germany

Abstract: The paper tries to derive lessons from the UK experience with inflation targeting (IT) for the Czech monetary policy. Reasons for introducing the IT in both countries have been very similar. After intermediate targets failed, both central banks searched for a new strategy. When implementing the IT scheme, their approaches have been very similar although in some cases different tools have been implemented in order to overcome generally recognized problems. For example, flexibility has been gained by reduction in targeted index in the Czech case while explicit exemptions have been introduced in the UK case. The UK experience with the IT shows that inflation might be reduced towards targeted level faster than expected. Some other policy dilemmas from the UK experience appear relevant for the Czech central bank. For example, due to exchange-rate appreciation, domestically produced inflation might exceed aggregate inflation. The paper also concentrates on role of forecasting in the IT framework.

Keywords: Czech; inflation; targeting; strategy (search for similar items in EconPapers)
JEL-codes: E (search for similar items in EconPapers)
Pages: 21 pages
Date: 2003-04-11
New Economics Papers: this item is included in nep-mac, nep-mon and nep-tra
Note: Type of Document - ; pages: 21 . This policy note from 1998 has not been published elsewhere.
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0304/0304006.pdf (application/pdf)

Related works:
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:wpa:wuwpma:0304006

Access Statistics for this paper

More papers in Macroeconomics from University Library of Munich, Germany
Bibliographic data for series maintained by EconWPA ( this e-mail address is bad, please contact ).