Abstract

http://ssrn.com/abstract=888415
 
 

References (25)



 
 

Citations (4)



 


 



Monetary Policy Targeting in Central Europe's Transition Economics: The Case for Direct Inflation Targeting


Lucjan T. Orlowski


Sacred Heart University - John F. Welch College of Business

August 1998

CASE-CEU Working Paper Series No. 11

Abstract:     
Monetary policies of Poland, Hungary and the Czech Republic have undergone a significant transformation in the 1990s. The initial currency peg and the exchange-rate-based monetary policy have been gradually replaced by more flexible exchange rates and money-based policies. Preparations for accession to the European Union and, later, to the European Monetary Union, call for further policy advancements including effective measures for lowering inflation, for reducing volatility of interest rates and market exchange rates, and for stabilizing domestic financial markets. Monetary authorities need to gain credibility for their policies, which should become more transparent, forward-looking and predictable. This paper argues that direct inflation targeting will be a desirable monetary policy approach for accomplishing these objectives. At the initial stage of monetary policy adjustments, a stricter form of inflation targeting is proposed in order to strengthen central banks policy discipline and commitment to disinflation. When price indexes reach a more sustainable level, flexible inflation targeting is advised. After the candidates join the EU and begin preparations for accession to the EMU, direct inflation targeting will have to be gradually phased-out and replaced by the euro-peg.

Number of Pages in PDF File: 23

Keywords: transition economies, monetary policy, direct inflation targeting, monetary convergence, euro-peg

JEL Classification: E42, E52, E58, P24

working papers series


Download This Paper

Date posted: March 6, 2006  

Suggested Citation

Orlowski, Lucjan T., Monetary Policy Targeting in Central Europe's Transition Economics: The Case for Direct Inflation Targeting (August 1998). CASE-CEU Working Paper Series No. 11. Available at SSRN: http://ssrn.com/abstract=888415 or http://dx.doi.org/10.2139/ssrn.888415

Contact Information

Lucjan T. Orlowski (Contact Author)
Sacred Heart University - John F. Welch College of Business ( email )
5151 Park Avenue
Fairfield, CT 06825
United States
203-371-7858 (Phone)
HOME PAGE: http://www.sacredheart.edu/ltorlowski.cfm
Feedback to SSRN


Paper statistics
Abstract Views: 679
Downloads: 157
Download Rank: 105,871
References:  25
Citations:  4

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo6 in 0.547 seconds